ISLAMABAD: Gross Fixed Capital Formation (GFCF), considered as fixed investment, stood at Rs 5,099.1 billion in financial year 2017-18 as compared to Rs 4,632.8 billion last year posting a growth of 10.1 percent, according to Economic Survey released by the Finance Ministry here on Thursday.
Private sector Gross Fixed Capital Formation (GFCF) posted a growth of 5.2 percent as it increased to Rs 3,371.2 billion compared to 3,205.5 billion last year while the public sector GFCF increased to Rs 373.3 billion compared to 339.5 billion last year showing a growth of 9.9 percent.
Estimates of GFCF in the General Government sector are based on budgetary data of federal, provincial and district governments. Estimates for the year FY 2018 are placed at Rs 1,354.6 billion against Rs 1,087.7 billion in last year, which are higher by 24.5 percent. The expenditure on GFCF incurred by federal, provincial and district governments has increased by 23.9 percent, 22.1 percent and 45.7 percent, respectively.
At current prices, in public sector, major positive contribution in GFCF remained in agriculture (257 percent) which increased from Rs 122 million to Rs 435 million followed by electricity and gas (70.9 percent) which increased from Rs 138.5 to 236.7 billion. While others in transport and communication (71.2 percent), (Pakistan National Shipping Corporation increased from Rs 0.6 billion to Rs 5.5 billion, Port Qasim Authority increased from Rs 0.5 billion to Rs 9.2 billion, PARCO increased from Rs 0.07 billion to Rs 12.8 billion).
Some industries in public sector have witnessed negative growth including mining & quarrying (57.1 percent), which decreased from Rs 64.2 billion to Rs 27.6 billion due to OGDC (Plant & Machinery declined from Rs 48.4 billion to 12.7 billion), LSM (39.1 percent) due to National Refinery Limited (Rs 28.1 billion vs 0.37 billion). Railways in transport & communication declined by 72.9 percent (Rs 39.4 billion to Rs 10.7 billion) and finance & insurance declined by 35.1 percent due to EOBI (Rs 9.8 billion to 4.9 billion).
In private sector, at current prices, the estimates of GFCF in agriculture sector stands at Rs 1000.2 billion during FY 2018 against Rs 928.9 billion last year showing a growth of 7.7 percent mainly due to increase in domestic agriculture machinery (from Rs 39.7 billion to Rs 57.0 billion) and value of stock in the livestock (from Rs 730.5 billion to 776.0 billion). Estimates of GFCF in mining and quarrying sector during FY 2018 are estimated at Rs 50.1 billion against Rs 49.8 billion last year registering a nominal growth of 0.6 percent due to less expenditure in exploration costs.
Estimate of private sector GFCF in wholesale & retail trade sub-sector has grown by 10.4 percent during 2017-18. The private sector GFCF in Transport & Communication sector has increased by 0.4 percent in FY 2018 to Rs 472.1 billion from Rs 470 billion last year.
Mobile phone companies have reported provisional GFCF conservatively. Moreover, remaining sub-sectors such as housing services and other private services have registered GFCF growth of 8.3 percent and 10.9 percent during 2017-18 respectively.
In the large scale manufacturing (LSM) sector, GFCF in private sector is composed of in-production and under-construction units.
GFCF for private large scale manufacturing sector for the year FY 2018 is estimated at Rs 481.9 billion against Rs 479.5 billion during last year showing a modest increase of 0.5 percent. Conservative reporting of provisional capital formation by private companies is the main reason behind this slow rate
of increase.
Expenditures on GFCF for Electricity Generation & Distribution and Gas Distribution sector stands at Rs 6.3 billion during FY 2018 against Rs 9.2 billion last year registering a decline of 31.2 percent mainly because of lower expenditure reported by Independent Power Producers.
GFCF in construction sector for the year FY 2018 is estimated at Rs 69.4 billion against
Rs 82.9 billion last year, which is 16.2 percent lower. This is due to lower imported construction machinery which declined from Rs 50.4 billion last year to Rs 42.6 billion current year.