The National Accounts Committee (NAC) has accepted numbers showing that, in spite of efforts by the Special Investment Facilitation Council (SIFC), Pakistan’s investment ratio fell to just 13.1% of the size of the economy in the outgoing fiscal year, the lowest level in all 50 years.
Fears that the SIFC by itself would not be able to significantly increase investment until Pakistan’s economy and political stability are improved are confirmed by this 50-year low investment-to-Gross Domestic Product (GDP) ratio.
The population estimate provided by the Pakistan Bureau of Statistics (PBS) in the National Accounts that were authorized the day before was similarly disparate, according to official statistics. Due to this disparity, the per capita income for the last fiscal year was inflated by $1,674 per person. The country’s population was 241.5 million in 2023, according to the findings of the population census; however, the PBS utilized an older estimate of 236 million.
The interim National Accounts estimates show that Pakistan’s economy’s share of savings and investments has continued to fall short of the declared goals for the last fiscal year. The crises in the external sector are a result of such low ratios of savings to investments.
The investment-to-GDP ratio in the last fiscal year was 13.1%, below the objective of 15.1%. In the last 50 years, this ratio is the lowest. When the investment-to-GDP ratio was previously this low, 13.2% of GDP was invested in the fiscal year 1973–74.
By a parliamentary act, the government of the Pakistan Democratic Movement (PDM) created the SIFC with the goal of increasing the nation’s low investment and removing obstacles to economic expansion. The military and civilians work together to manage the SIFC. It has spent the last year making a lot of efforts. These initiatives haven’t, however, yet produced noticeable outcomes.
According to reports, the International Monetary Fund (IMF) has asked Pakistan about the amount of investment it anticipates making in the current and upcoming fiscal years during ongoing negotiations.
Thus far, the SIFC has been successful in eliminating procedural obstacles and resolving problems with cooperation between the federal and local administrations. But neither local nor international investment has significantly increased as a result of these initiatives.
The investment-to-GDP ratio of 13.1% is far lower than that of counterparts in the area. It was 14.1% at this same time last year.
Although Saudi Arabia has promised to spend up to $5 billion in Pakistan, these promises have not yet materialized into agreements. Additionally, the fixed investment-to-GDP ratio decreased from 12.4% to 11.4% from the previous year. In this fiscal year, private sector investment fell to 8.7% of GDP, the lowest level in over 25 years.
