Federal budget 2014-15 —-An Overview

August 21, 2014 | By More

In the outgoing fiscal year 2013-14, macroeconomic performance of the economy improved. GDP growth picked up, mainly driven buget4 by improved performance of industry and services sector. Economic growth has suffered in recent years because of problems in the energy sector, security concerns and a difficult investment climate. GDP growth has averaged 3 percent in the last few years, well below what is required to provide jobs to the growing youth population and in reducing poverty. As energy supplies improved with the payment of power sector circular debt, there was some reduction in power shortages during the year which contributed positively towards the growth of the industrial sector. Electricity generation and its distribution contribute 9.2 percent in industrial sector and its share in the GDP is nearly 2.0 percent. This sub-sector registered a growth of 3.72 percent in FY14 compared to negative growth a year earlier. Improved supplies helped uplift industrial activities, and large scale manufacturing registered a growth of 5.31 percent as compared to 4.1 percent in the preceding year.

A major concern for economic growth is the low level of investment in the economy. The rate of investment to GDP has fallen from 19.2 percent in FY08 to 14.0 percent in FY14. The decline has been more pronounced for private fixed investment which has fallen from 12.8 percent to 8.9 percent in the corresponding period. With low domestic savings in the economy, the saving investment has to be financed by foreign resource inflows.

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Category: Taxation and Budget

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