Analysts point out that in the last five years, the growth rate averaged just 3.04pc which is also the lowest five-yearly average economic growth for Pakistan.

Bad news for President Zardari led Peoples’ Party of Pakistan is that average GDP growth in the current government’s tenure (FY09-12) stands at 2.9pc as against 6.6pc recorded by the military regime of Gen Musharraf.

During this very period, India logged a growth rate of 7.8 per cent, while Sri Lanka did well with 6.8 per cent and Bangladesh, which was East Pakistan till 1971, recorded an  impressive GDP growth rate of  6.1pc..

Statistics don’t tell all- the story but headlines in daily newspapers do. Going by this bench mark Pakistan is in a bad shape since the headlines are dominated by energy crisis and water shortage besides stagnation in manufacturing and export sectors.

Another indicator of economic health, fiscal deficit has shot up to five percent and thus crossed the target of 4.7 per cent set for the fiscal, according to the Economic Survey. But analysts hold the view that the actual deficit would be somewhere around 6.5 per cent and that it would balloon further if electricity arrear payments, which have peaked to 8.3 per cent, are included.

Islamabad doesn’t appear to hope for big foreign economic assistance. The country received a paltry $1,660 million as total foreign economic assistance in the first nine months of 2011-12, economic survey shows. These flows are from the back log and are not fresh aid flows.   Friends of Pakistan club members and others committed $4,580 million during 2010-11, and $1967 million during 2011-12.

Since the Pakistani government is going to bridge its deficit by local borrowings, it will put pressure on domestic liquidity and crowd out private sector borrowings. Yet another bad news for the beleaguered economy, which has seen three changes in four years at the head of Pakistan’s central bank- the State Bank of Pakistan (SBP)

Already, Pakistan’s public debt has soared by 12.3 per cent, taking the outstanding dues from the public exchequer to a staggering Pakistani Rupees 12.024 trillion this year, up from Rs10.709 trillion last year.   Foreign debt is around Rs60.3 billion.

In 2008, according to the Economic Survey, the public debt was just Rs6.055 trillion, which doubled in the past four years, which is a sad reflection on the PPP led rule in the country.  The rupee losing value against the dollar and other major international currencies contributed no less to multiplying the debt.

So the non-availability of foreign funding translated into more borrowings in the domestic market. It touched Rs.7.206 trillion in 2011-12. In percentage terms, the domestic debt inched to 59.9 per cent, up from 46.6 per cent between FY 1990 and FY 2012. As a part of the GDP, it works out to 58.2 per cent.

And this has increased debt servicing costs. An estimated Rs719 billion was the outgo under the head in the first nine months of fiscal 2011-2012 whereas the amount earmarked was Rs1.034 trillion for the whole year. Repayments of external debt cost claimed $3.567 billion.

If Pakistan begins repayment to the IMF its stand by arrangement, it will put great pressure on its finances. Debt owed to the IMF aggregated up to $8.1 billion at the end of March while payments amounting to $793 million have been made in the third and fourth quarter of FY2012.
 
As some home grown economists say, Pakistan’s economy is an ICU – intensive care unit. Yet no reappraisal of the priorities is undertaken and the defence budget continues to claim lion’s share of the outlays. In fact, in the FY2012-13, it claimed close to seven per cent higher outlay than the Public Sector Development Programme. And accounts for about 19 per cent of the total budget of Rs2, 960 billion.

The defence allocation is around Rs545 billion while the development outlay is Rs360 billion, as the budget papers show. The proposed defence expenditure is slightly higher than the allocated for all the provinces, which is Rs513 billion.  Pakistan’s budget, traditionally, doesn’t provide a mirror to the amounts spent on defence. Funds earmarked for the Strategic Plans Division, which is responsible for nuclear arsenal and facilities, are also not reflected in the defence bill.

Big ticket allocations are made to hide behind different heads in the name of national interest and security. The army gets lion’s share at Rs264 billion, while Air Force is satisfied with   Rs114 billion for Air Force and the Navy is made to settle for Rs52.7 billion.