Despite considerable international geo-political downside risks and emerging commodities super cycle phenomena, the government on Friday said that Pakistan’s economy would reach around the original National Economic Council (NEC) economic growth target of 4.8pc for fiscal year 2022 (FY22). According to a Mid-year Economic Review (July-Dec 2021-22) issued by the ministry of planning, the agriculture sector is expected to achieve envisaged full year growth target of 3.5pc keeping in view impressive performance of Kharif crop and prospects of good wheat crop, however, agriculture growth is mainly contingent upon availability of certified seed and pesticides during the Rabi season. The industrial sector was projected to grow by 6.5pc based upon Large Scale Manufacturing (LSM) target of 6pc. However, with the revised full year number of LSM for FY22, achieving targeted 6pc growth is now unlikely. Construction sector is expected to post healthy growth due to the construction amnesty scheme and concessional credit availability for the housing sector, the report added. It said the services sector growth is mostly reliant upon performance of commodity producing sectors and imports. The expected revival in the commodity producing sector and higher than anticipated growth in imports will push services sector growth upward. Higher financial intermediation, and 38pc growth in IT related services will also provide additional boost to the Social and Community services sector. On fiscal and external account, slippages are expected as pressures on imports will only gradually moderate and notwithstanding stellar revenue efforts on taxation side, expenditure side will remain under pressure to finance delivery of social sector services and vaccination rollout programs. The report added that the Annual Plan 2021-22, which was presented to the NEC meeting held on June 07 2021, was presented against the backdrop of partial closure of economic activities due to containment measures to check the rapid spread of COVID-19 pandemic. Therefore, keeping in view the uncertainties, cautious approach was adopted to set growth targets for FY22. The Annual Plan for 2021-22 envisaged GDP growth at 4.8pc based upon contributions from agriculture (3.5pc), industry (6.5pc) and services (4.7pc). During first half of current fiscal year (1HFY22), industrial and services sector activity picked up and agriculture sector performance looked impressive as far as estimates ofKkharif crops are concerned. This pick-up is evident from an increase of 71.2pc in car sales during 1HFY22 to 114,765 units in comparison with the same period of last year, sales of high-speed diesel (HSD) hit an almost four-year high at 0.84 million tons in October, and electricity consumption rose by 13pc during 1QFY22. Credit to private sector reached its highest ever level. Despite monetary tightening, auto financing is up by 34pc, credit card spending is up by 26pc, housing finance by 72pc and personal loans by 72pc in January 2022 over January 2021 which reflects immense demand pressures in the economy. Google mobility index shows 50 percent increase in mobility across Pakistan over the baseline (pre-Covid), which means that economic activity is likely to be even higher than pre-Covid level. SECP registered companies posted highest ever increase in profitability in almost a decade during 1QFY22 and new registered companies grew by 44pc in 1QFY22. The report said the broad-based improvement in economic performance is indicative of building on the V-shaped growth recovery achieved during FY21. However, the tenuous spillover between growth acceleration and the external sector vulnerabilities once again surfaced during 1HFY22. The structural characteristics of balance of payments constrained growth along with a global surge in commodity prices manifested in the highest ever import surge in December 2021. These developments led to recent fiscal and monetary policy responses aimed at rebalancing growth in aggregate demand with the external sector sustainability. While all high-frequency indicators are reflecting growing economic. The report added that the current fiscal year started with positive prospects for building upon momentum of economic growth achieved during the last fiscal year FY21. External environment underpinned by global commodity price hike was feeding into initially perceived as transitory buildup of higher prices of energy and import-based consumables. Last year’s rally in international prices of commodities appears to be now turning into a commodity super-cycle which is likely to prevail over an extended period of time. In its latest January 2022 projections, International Monetary Fund (IMF) has revised down economic growth for advanced economies from 5pc in 2021 to 3.9pc in 2022 and for emerging and developing Asia from 7.2pc in 2021 to 5.9pc in 2022. International crude oil prices during January 2022 are already scaling 7-year high level. The report added that other commodities prices and shipment predicaments are major headwinds as US, UK, EU and Germany and many emerging markets have been hit by elevated levels of inflation in almost 3 decades. In this backdrop, it is not surprising that inflationary pressures mounted in the economy and the government has to adopt demand management tools to counter inflation.