LAHORE - The energy crisis stemming from exogenous factors and structural weaknesses along with security challenges have continued to restrict Pakistans economic growth during last three years. In FY11, the fragile state of the economy was further aggravated by catastrophic floods. The floods wiped out about 2 percent from the economic growth while inflicted a massive damage of $10 billion on economic infrastructure. Resultantly GDP grew by a meagre 2.4 percent in FY11. Thus, Pakistans 3-year (FY09-11) average economic growth in PPP-led government stood lowest in 3-decades at 2.6 percent. During the same period developing Asian countries grew by 8.4 percent with India, Sir-Lanka and Bangladesh showing a growth of 7.7 percent, 6.6 percent and 6.0 percent, respectively. The recent Economic Survey 2010-11 has adjusted previous two years (FY09-10) growth rate to 1.7 percent and 3.8 percent, from 1.2 percent and 4.1 percent, respectively. Furthermore, per capita income in dollar terms has improved by 16.9 percent to stand at $1,254 in FY11 as against $1,073 in FY10. The major highlights of the survey are as following. The onus of growth in FY11 was primarily on services sector showing an increase of 4.1 percent, while the performance of the other two sectors (agriculture and manufacturing) were marred by impact of devastating floods and acute energy shortage. Devastating floods restricted the agricultural growth to a meager 1.2 percent, while severe energy shortage and cut in public sector expenditure were the major factors behind a restricted growth of 3.0 percent in the manufacturing sector. On the agricultural front, major culprit behind the dismal performance was decline in major crops (4 percent) which contributes 31.1 percent of the said sector. Within the major crops cotton and rice were hardly hit by floods as these two witnessed a decline of 11.3 percent and 29.9 percent respectively in FY11. As per the latest available numbers, Large Scale Manufacturing (LSM) increased by 1.71 percent mainly caused by improvement in the sub-groups of food and beverages (9.3 percent), leather (30 percent) and automobile (14.6 percent). The positive impact of these was partially diluted by negative growth in petroleum group, down 4.2 percent. Furthermore, national saving as a percentage of GDP slightly improved to 13.8 percent as against 13.1 percent last year, while total investment dropped significantly to 13.4 percent versus 15.4 percent of GDP last year. Heightened security concerns, cut in the public sector spending and acute energy shortage were the major factors deterring investments. After the floods fiscal deficit target was upwards revised to 5.3 percent of GDP but we believe the actual deficit would balloon to 6.5 percent, despite recently taken austerity and taxation measures. According to the survey, CPI inflation is estimated to be 14.1 percent in FY11. However, with recent decline in the international oil prices along with high base effect, average inflation is expected to remain below 14 percent, we believe. Some thing to cheer about in FY11 was burgeoning remittance (up 24 percent in 10MFY11) and higher exports (up 28 percent in 10MFY1), which has rendered into favourable current account surplus of $780m in 10MFY11. Overall, current account is expected to stand at surplus 0.35 percent of GDP after 7-years.