Pakistan’s budget 2015/16 depicts 5.5 percent increase in GDP

Are we entering an era of prosperity? Should you invest in Pakistan?  Pakistan’s report card for the year show reasons to celebrate as well as cause concern.

The announcement of the Pakistan 2015/16 budget saw an increase of 5.5 percent in the GDP ratio, successfully overcoming the global financial crisis and promising an economic boost for the coming year.

Finance Minister Ishaq Dar still has to present the blueprint for the next fiscal year (July-June) to the Parliament; his report will support the GDP for 2014/15 at a 4.2 percent value, short of the 5.1 percent target.

The next year’s forecasts anticipate several shortfalls such as daily power shortages, reduced industrial production and below target tax collection. Economists predict that despite achieving the set target, Pakistan might fall short of meeting needs of 180 million people with the expenditure crossing beyond 4 trillion rupees (around $40 billion).

Muzzammil Aslam of the think-tank Emerging Economics Research said, "Considering our population, to generate enough employment for a growing workforce our GDP growth rate should be around 7 percent plus”.

Dar said that Pakistan's fiscal deficit would fall to 4.3 percent of GDP in the next financial year compared to an original target of 4.9 percent in 2014/15. Defence budget of next year expects an increase of 10 percent over 2014/15, at 772 billion rupees. Due to the negligence of the tax payer, the government faces a big challenge in effectively managing its tax inputs. Only about one in 200 citizens files their income tax, putting pressure on the government to seek donations to fund deteriorating schools and hospitals.

Pakistan's Federal Board of Revenue has targeted a 19 percent increase in tax receipts to 3,100 billion rupees for 2015/16. Infrastructure projects see a boost of $46 billion as a result of the deal signed with China to build a road and energy corridor between the two countries.

Pakistan continues to develop and revolutionise its infrastructure, to ensure international investment and partnerships are encouraged and furthered. At SIEM Pakistan, we look forward to working with you in your international student recruitment efforts. Please click here to view the annual activity calendar.

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