Govt projects average growth rate of 6.7 percent under 12th Five Year Plan

ISLAMABAD: The National Economic Council (NEC) on Tuesday gave go-ahead to the 12^th Five Year Plan amidst a boycott by the three provinces, targeting an average economic growth rate of 6.7 percent.

Also, the 12^th Five Year Plan envisions to decrease public debt below 60 percent of the entire national output by 2023, reported Express Tribune.

The exports are also envisioned to be doubled to $48 billion under the 12^th Five Year Plan and raise the foreign direct investment to $7.6 billion.

The NEC is a constitutional body which has the authority to guide provinces and the centre on matters of macroeconomic framework, headed by the Prime Minister Shahid Khaqan Abbasi.

After the NEC’s go-ahead to the 12^th Five Year Plan, three provinces boycotting the proceedings walked out of the meeting.

But the NEC gave go-ahead to the Annual Plan 2018-19 which saw participation by all the federating units.

The main aim of the 12^th Five Year Plan is to target average economic growth rate of 6.7 percent. The plan envisages this growth being fueled by increased contribution from services and industrial sector.

And the agricultural average output is targeted at 4 percent for 2018-2023.

To achieve an average growth rate of 6.7 percent during the above-mentioned period, the government would require raising the investment-to-GDP ratio to around 20 percent from the existing 16.4 percent as per the Planning Commission.

The 12^th Five Year Plan pledges to introduce fiscal space, which can be achieved by decreasing public debt via widening of tax base and controlling expenditures.

And the projected growth in money supply will be 15 percent by 2022-23 with inflation forecast at 7 percent in this period.

The plan envisages raising the tax-to-GDP ratio to 15 percent, budget deficit to be decreased from current 5.5 percent of GDP to 4 percent under the 12^th Five Year Plan.

12^th Five Year plan forecasts total investment-to-GDP ratio to increase to 19.6 percent from existing 16.4 percent, fixed investment is projected at 18 percent, national savings 19.3 percent of GDP.

Current account deficit is projected under the 12^th Five Year Plan is projected to be a meagre 0.3 percent of GDP.