Inflation

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Economic
Survey of
Pakistan
2002-03

An online publication by

Chapter 1. Growth and Investment

1. Growth and Investment
The outgoing fiscal year 2002-03 has

region are expected to be the star performers with

witnessed a sharp recovery in economic growth

growth exceeding 6.0 percent. With the exception

accompanied by equally impressive performance

of Thailand, the other ASEAN countries are

of agriculture and large-scale manufacturing.

projected to grow by less than 5.0 percent. Barring

Other significant achievements have been the

Iran, the other countries in the Middle East are

impressive growth in per capita income, both in

almost stagnating. In Africa, no country could

rupee and dollar terms, and national savings

achieve 5.0 percent growth in 2002-03. In South

reaching

total

Asia, Pakistan is the only country which achieved

investment and suggesting a large surplus in the

more than 5.0 percent growth in 2002-03. Two

current account balance. When viewed at the

points need to be noted as far as Pakistan's

backdrop of inhospitable external environment

growth performance is concerned. Firstly, when

and uncertain geo-political situation Pakistan's

compared with major economies of different parts

growth performance has been impressive in 2002-

of the world, Pakistan’s growth performance has

03. This year has witnessed major corporate

been impressive. Secondly, in a subdued global

scandals and bankruptcies in the United States,

economic environment, an impressive recovery in

resulting in bursting of the equity market bubble;

growth

rising uncertainties in the run up to war in Iraq,

resilience to external shocks.

new

heights



exceeding

simply

displays

Pakistan's

greater

causing oil prices to rise sharply, and recent
outbreak of Severe Acute Respiratory Syndrome

The real GDP at factor cost was originally

business

targeted to grow by 4.5 percent in 2002-03, with

environment in Asia. There developments on

agriculture and manufacturing growing by 2.5

international

(SARS)

virus

badly

affecting
scene

created

percent and 5.8 percent, respectively. The growth

economic

outlook

target was largely dependent on recovery in

remained subdued and global trade remained

agriculture, manufacturing, rapid growth in

sluggish during the outgoing fiscal year.

exports and higher level of investment. All three

uncertainties.

economic
The

world

major sectors of the economy namely, agriculture,
growth

manufacturing and services responded positively

performance of selected regional economies in

to the incentives embodied in economic revival

2000-03. The performance of the major growth

program and comfortably surpassed the growth

poles of the world economy (US, Japan and Euro

targets. The real GDP at factor cost grew by 5.1

Area) are likely to remain subdued with Japan

percent and was supported by a 4.2 percent, 7.7

and Euro Area economies growing by less than

percent and 5.3 percent growth in agriculture,

1.0 percent in 2002-03. The United States is

manufacturing and services, respectively. The real

expected to perform better as compared with last

GDP at market prices recorded an impressive

year. Developing countries as a whole is expected

growth of 5.8 percent as against a growth of 2.9

to grow by 4.6 percent. China and Korea in Asian

percent last year.

Table

1.1

documents

the

Chapter 1. Growth and Investment
Table 1.1
Regional Growth Performance
Real GDP Growth (%)

Region/Country
World GDP
Euro Area
United States
Japan
Germany
Canada
Developing Countries
China
Hong Kong SAR
Korea
Singapore

2000-01
4.7
3.5
3.8
2.8
2.9
4.5
5.7
8.0
10.2
9.3
9.4

2001-02
2.3
1.4
0.3
0.4
0.6
1.5
3.9
7.3
0.6
3.0
-2.4

2002-03
3.0
0.8
2.4
0.3...
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