The Pakistan Tehreek-e-Insaf (PTI) government has slightly adjusted downwards the projected economic growth rate to 6.7% at the end of its five-year term, which it wants to achieve on the back of expansionary fiscal policies, which is clearly in conflict with a possible International Monetary Fund (IMF) programme.In a new draft of the 12th Five-Year Plan, the government shows average five-year budget deficit at 4.9% of gross domestic product (GDP) and Rs5.2 trillion worth of total spending under the federal Public Sector Development Programme (PSDP) in five years. Total development spending by four provinces and the federal government has been shown at Rs11.75 trillion.These proposed targets do not go with macroeconomic projections under the IMF programme.The Ministry of Planning and Development on Friday shared a summary of the 12th Five-Year Plan with Prime Minister’s Economic Advisory Council (EAC). The new draft shows a slightly downward revision in economic growth targets but targets of budget deficit and PSDP portray expansionary fiscal policies.“This plan leads to a path that does not go to the IMF,” remarked Dr Ashfaque Hasan Khan, a senior EAC member after the meeting. Khan is against the idea of seeking an IMF bailout package.An official statement of the planning ministry stated that the 12th Five-Year “Plan envisages average GDP growth of 5.4%”. It added that the expected outlay of the plan would be Rs11.75 trillion including Rs1 trillion in innovative financing through public-private partnership.Half of the proposed Rs11.75-trillion development spending will be the responsibility of the federal government, which may not be possible under any IMF deal.Compared to its initial draft, the government has now lowered GDP growth projections. Earlier, it had projected 5.8% average economic growth during 2018-23 period.The planning ministry had earlier projected 4.2% growth for this fiscal year, which has now been shown at 4%. The economic growth for last year of the PTI’s tenure, fiscal year 2022-23, has been shown at 6.7% against previous 7%.The five-year average growth in the agriculture sector has now been lowered to 3.3% from 3.6% and the industrial sector growth has been put at 5.8% against 6.1% earlier. The major downward revision is in the services sector whose growth has now been shown at 5.9% against 6.8% earlier.The average 5.4% GDP growth is slightly higher than the average 4.8% growth that the PML-N government achieved during its 2013-18 term.The 12th Five-Year Plan has extensively covered growth, macro stability, expanding agriculture production, galvanising agro-business potential, industry and export competitiveness, said Planning Minister Makhdoom Khusro Bakhtyar.He said human resource development, integrated energy planning, infrastructure development, social safety nets, poverty reduction and administrative reforms along with focus on less developed areas, climate change and environment were the other key areas.Bakhtyar said it had been decided to conduct quarterly reviews of the 12th Five-Year Plan at the ministry and biannual review meetings would be chaired by the prime minister for its effective implementation and achieving all targets. He stated that priority would be given to projects related to infrastructure development, transport, housing, communication, energy and water sectors.But the problem is the fiscal projection. The government has shown the average budget deficit at 4.9% for the five-year period, which is far higher than what the IMF suggested during staff-level discussions. The average current account deficit has been projected by the planning ministry at 3%.During the meeting, Dr Ashfaque Hasan Khan told the planning minister that his 12th Five-Year Plan was inconsistent with the IMF programme, according to the ministry officials.The planning minister said the development strategy also entailed boosting the country’s exports as well as envisaged a mechanism to monitor the progress of ongoing projects. He added that the plan was aimed at improving productivity of all sectors of the economy.He said the government was committed to ensuring timely completion of all ongoing projects without any cost escalation.Planning Secretary Zafar Hasan said the plan document had been prepared through an extensive consultative process involving dialogue with stakeholders and formal consultation with members of different working groups formed for different sectors.Inflation is projected to remain around 7%. The planning ministry has projected tax-to-GDP ratio at 14.5% at the terminal year of the plan. Total revenues have been shown at 16.6% of GDP and total expenditures at 21.5% of GDP.The current expenditures - the problematic area - has projected at 16.8% of GDP at the end of the plan period.The PSDP spending is shown at 4.7% of GDP, which is significantly higher than what the finance ministry assumed under the IMF programme.The investment-to-GDP ratio has been shown at 19.3% of GDP as against 16.3% in the last fiscal year. The private investment-to-GDP ratio is shown at 12.4%.The planning ministry said that after taking the inputs and suggestions from the members of the Economic Advisory Council, the plan will be placed before National Economic Council for consideration and approval.Published in The Express Tribune, February 23, 2019.Like Business on Facebook , follow @TribuneBiz on Twitter to stay informed and join in the conversation.