Charter of the Economy Unemployment Rate * (%) 8.5 8.2 8.0 10.0 15.0 13.0 Rate of Inflation( CPI,%) 2.9 4.2 3.9 7.3** 10.7 8.9 Food Prices 2.1 3.8 1.8 4.6 15.0 12.8 Non-Food Prices 3.4 4.4 5.4 9.2 8.2 6.7 *’ True ’ unemployment rate, including underemployment and worker discouragement effects. ** The base year was changed to 2015-16 from July 2019 onwards. Sources: PES, SBP , MOF, PBS, CPI, PBS, LFS Both agriculture and industrial sectors have performed poorly. There have even been years when the growth rate was negative or near zero. The agricultural sector grew by only 0.2 percent in 2015-16. Over the last five years the sector has averaged a growth rate of only 1.9 percent. Historically, a GDP growth rate of 6 percent has required agricultural growth of 4 percent or more. The manufacturing sector witnessed a decline in output of 0.7 percent in 2018-19 and of 7.4 percent in 2019-20, after COVID-19. The last time there was negative growth of the sector was as far back as 2008-09. The sector will have to play the role of the leading sector once again in the process of growth. From the average growth rate of 3.1 percent in the last five years, excluding 2019-20, the growth rate will have to rise to 7 to 8 percent if the GDP growth rate of 6 percent is to be attained. Level of Investment The level of fixed investment reached a peak of 15.7 percent of the GDP in 2017-18, which facilitated attainment of the GDP growth rate of 5.5 percent. However, over the last four years the average is 14.6 percent of the GDP. During the 80s when the GDP growth rate reached 6.5 percent the level of investment almost reached 19 percent of the GDP. This rate will have to be attained once again. There has been a decline in the level of public investment from above 5 percent of the GDP to below 4 percent of GDP in the last four years. Infrastructure constraints to growth have emerged in the form of limited water availability and high energy costs. There is need for lumpy investments in large hydro-electricity projects and for improving and expanding the power transmission and distribution system. As such, the public investment program will have to be raised to over 5 percent of the GDP with much stronger prioritization of projects. The level of private investment has remained almost unchanged at 10 percent of the GDP since 2015-16, as shown in Table 1.1. There is currently a relatively high rate of capacity utilization and the resulting absence of excess capacity to bolster rapidly the rate of growth of output. Further, there is need for state-of-the art investments to move up the value chain and diversify the export base. As such, the level of private investment will have to rise to 12.5 percent of the GDP. 4