The just-released National Accounts Estimates for 2015 shows that the investment forecasts by the Statistics office appear to give greater weight to public than private sector projects. Public investments will increase by 21% in real terms ( or 25% in nominal terms from Rs19 bn to Rs24bn) .while private investments will increase by 1.7% in real terms (or 4.7% in nominal terms from Rs 55bn to Rs58 bn).
The share of private investment in GDP will in fact fall rise from 14.2% in 2014 to 14.0% in 2015, while the share of public investments will rise from 4.9% to 5.7%.The proportion of private to public investments is thus projected to fall sharply from 74% in 2014 to 70% in 2015.Clearly, the Statistics office has taken the budget into account, but not given so much weight to the private megaprojects, which will not influence investments significantly in the short term. The budget’s strategy of reliance on private sector investments is only partly reflected in the 2015 GDP forecast. The Statistics office has been cautious, to a fair degree.
Although capital spending has been reduced in the budget for 2015-16, the ongoing public capital projects and the start of some new projects (if fully implemented) is raising public investments in 2015.
The budget forecasts a real GDP growth rate of 5.3% in 2015-16, i.e a likely rough average of 4.6% in 2015 and 6% in 2016.[5.3=(4.6+6)/2]. The Statistics office is instead forecasting 4.1% in 2015. If this growth of 4.1% is realized in 2015, then to achieve 5.3% growth in 2015-16, growth in 2016 will have to rise to 6.5%, which is quite unrealistic.[5.3= (4.1+6.5)/2]
A bunch of Jokers !!!!!
