Infrastructure investment to sustain economic growth, says PM Anthony

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Infrastructure investment to sustain economic growth, says PM Anthony

pakistan-economy-growth

Growth in the local economy is expected to be sustained in 2016, driven by continued improvements in the construction industry and growth in tourism, according to Prime Minister Dr. Kenny Anthony.

In his New Year’s address, the Prime Minister said increased foreign direct investment in the hotel sector is expected to be the main impetus for the growth in the construction sector.

However, this projection is subject to downside risks related to the global outlook of the economy, developments in mainland China, a slowdown in emerging market economies and movements in commodity prices, particularly oil.

In providing a report on the performance of the economy in 2015, Dr. Anthony said most economic sectors showed signs of recovery within the first nine months of 2015, as the construction sector gained momentum amid renewed confidence in the economy.

“This was supported by continued buoyancy in tourism, agriculture and other services,” he explained.

Dr. Anthony said construction activity was led by the private sector as work commenced on the construction of the Royalton Hotel (the former Smugglers Resort), among others.

This increased level of activity was reflected in a 13.5 percent increase in the importation of construction materials over the period from January to September 2015.

“The tourism sector continued to accomplish record performances, with a 6.4 percent increase in total arrivals over the January to November period,” he remarked.

An increase of 10.1 and 2.6 percent in cruise and stay over arrivals respectively over the period contributed to higher visitor expenditure, which stood at an estimated $414.5 million in the first half of the year.

Meanwhile, higher levels of domestic and export demand were reflected in a 6.3 percent increase in manufacturing production.

“The output of food and food products increased by 21.6 percent, corrugated paper and paper board by 12.5 percent, wood and wood products by 11.6 percent and furnishings by 16.1 percent. From all vantage points, these increases are welcome and encouraging,” Dr. Anthony said.

Further, the agricultural sector also experienced mixed fortunes during the review period.

He said, while there were declines in banana exports and livestock production overall, increases were recorded in pork production and vegetable production.

But purchases by supermarkets and hotels increased by an estimated 12.0 percent to 6,648 tons, reflecting in some measure, the success of the CFL farmer certification programme.

“Fiscal balances continue to show improvement. An overall deficit of $-27.2 million was recorded for the first half of the fiscal year 2015/16, representing a 55.8 percent reduction from the $-61.6 million in 2014/15. Total revenue and grants increased by 9.0 percent to $507.7 million while total expenditure remained relatively flat with a 1.4 percent growth to $534.9 million.”

This resulted in a current account surplus of $47.4 million in the first six months of the fiscal year compared to $19.6 million in the previous year.

Notwithstanding the improved fiscal performance over the first half of the financial year, Dr. Anthony cautioned that significant risks remain in managing local debt.

“We have to continue to inspire confidence in the management of our economy and contain reckless increases in our debt level,” he stated.

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4 COMMENTS

  1. These statistics, even if they could be believed or relied upon, are by and large very stale. Your guess is as good as mine as to what the real, but unsubstantiated projected data would say.

    Anyone with more than a smattering of economic knowledge would be able to see quite a number of inconsistencies and red flags in the questionable logic behind this rosy missive. Oh, the epistle is for the faithful? Got it.

    Knowledge of world economics would show that the Chinese economy is not the locomotive engine of growth it has been in the recent past. The authorities there are turning to domestic consumption as the driver of their economy, and not exports nor imports of raw materials from the emerging economies. The knock-on effects are being felt worldwide with the volatile oil market making matters very much worse, but not in our neck of the woods. It is only that Petro Caribe may collapse, if Iran pumps moral unto the market

    One swallow does not a Summer make. One hotel, if the logic is to believed, one hotel construction project is going to rescue our economy? There is the negative revenue impact of tax concessions, VAT included, imports or raw materials negatively impacting with balance of payments considerations, and the unknown construction and tourism multipliers. You cannot reliably project into the future with questionable or the absence of good data.

    When SJC had an inventory of metric tonnes of domestic bananas to sell, he could project his net gains from the sale. We today, cannot. If we do not have a clue about the level of the tourism spend, to even guesstimate the returns on standing hotel rooms, in use or being constructed.

    Long staying visitors help. But what is the tourism spend here too? Cruse passenger may also land and hardly spend a cent.

    The aggregation of revenue and grants raises some eyebrows. We need forensic economics too, it does seem. What is being hidden from those of us who want to know more and beyond the distracting mouthings about transparency. Why was that done? What are they hiding?

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    • Did they use the most favourable method for generating these unemployment statistics? There seems to be no stone unturned to make this sweating administration look good just before elections.

      Those who are smart enough, refuse to be lulled into complacency that anybody in this SLP government has a handle on what is going on today. This attempt to blind people with totally useless and ambiguous statistics works on the red Kool Aid punch-drunk moo moos in the SLP. The rest of us we know that the taste of the pudding is in the eating. No better days Kool aid for us in this hard guava season of bitterness. We don't eat statistics!

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    • Maybe that info wasnt made available before the address. Remember he didnt have the unemployment figures in a major economic address.

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