ISLAMABAD, May 31 (APP): Approving the Public Sector Development Programme (PSDP) at Rs. 520 billion, the National Economic Council (NEC) here Thursday projected the Gross Domestic Product (GDP) at 7.2 % and Inflation at 6.5 % for the fiscal year 2007-08.NEC, country's highest decision making economic forum was chaired by Prime Minister Shaukat here today also reviewed the economic performance during the current fiscal 2006-07 and set targets, besides giving approval to the Annual Development Plan for the next fiscal (2007-08).  Later briefing newsmen at a press conference here Deputy Chairman Planning Commission and Minister of State Dr.Muhammad Akram Sheikh said that NEC has approved a PSDP of Rs.520 billion for the financial year 2007-08.

He said out of total PSDP of Rs.520 billion, (Federal Rs.335 billion, Provincial Rs.150 billion and Rs.35 billion earthquake reconstruction).

Dr.Muhammad Akram Sheikh said that NEC noted that Pakistan has emerged as one of the fastest growing economies of the Asian region.

He said that the growth is broad-based and all the sectors of the economy are showing improvement and 2006-07 is the fourth year in a row registering economic growth of over 7%.

He said this impressive performance was attributed to the

continuity and consistency of policies initiated by the present regime within the

overall framework of deregulation, privatization and liberalization.

He said that a major breakthrough has been achieved in managing the domestic and external debt.

The ability of the country to borrow from international and regional capital markets at relatively low rates and long maturities has improved substantially.

Dr.Akram Sheikh said that country's debt to GDP has brought down from 100.3 percent in the year 1998-99 to 51 percent in the 2006-07.

He said that Euro Bond subscription was 7 times ($ 3.5 billion) above the required level of $ 500 million.

He said total investment has increased substantially and reached an all time record of Rs. 2004 billion (23.0 % of GDP) in 2006-07.

The public sector development expenditure (PSDP) excluding allocation for earthquake has witnessed a sharp increase from 2.2 percent of the GDP in 2002-03 to 4.1 percent in 2006-07.

He said in the last seven years, Pakistan has spent over Rs. 1,450 billion (6 % of GDP) on poverty related and social sector programs.

The Deputy Chairman Planning Commission said that the confidence of foreign investors in Pakistan economy has improved as non-debt creating capital flows expected to touch $ 6.0 billion.

The economy has also witnessed a sharp rise in the worker' remittances, which increased  to $ 5.5 billion during this year, he remarked.

He said that high economic growth, targeted poverty reduction, livelihood and social protection programmes and increase in pro-poor spending created gainful employment opportunities and brought  millions out of poverty in rural and urban areas.

He said that unemployment rate has declined from high level of 8.3 percent in 2001-02 to 6.2 % .

The poverty measured on head count basis, which was 34.4 percent in 2001, came down to 23.9 percent (10 percentage points) in 2005-06.

He added that trend of poverty reduction is more pronounced in rural areas.

He said that as a result of good agriculture production a lot of money has gone in the rural areas improving their income.