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Economy of Pakistan
Pakistanmontage.jpg
Karachi's downtown.
Rank 26th (PPP)
44th (Nominal)
Currency
1 Pakistani Rupee (PKR)
Rs.1 = 100 Paisas
Fiscal year
1 July – 30 June
Trade organisations
ECO, SAFTA, ASEAN, WIPO and WTO
Statistics
GDP $245 billion (nominal) (2014)[1]
$576 billion (2014 est.)(PPP)
GDP growth
3.7% (2012)[2]
3.3% (2013)[3]
GDP per capita
$1,307 (nominal; 143rd; 2013) [4]
$3,149 (PPP; 140th; 2013)[4]
GDP by sector
agriculture: 21.2%, industry: 25.4%, services: 53.4% (2010 est.)
Inflation (CPI)
7.93% (March 2014)[5]
Population below poverty line
21% (2013)[6][7][8][9]
Labour force
59.74 million (2012-13)[10]
Labour force by occupation
agriculture: 49.1%, Construction: 15.2%, Manufacturing: 13.3%, Wholesale and Retail: 9.2%, Transport and Communication: 7.3% (2012-13)[10]
Unemployment 5.6% (2012 est.)
Main industries
textiles and apparel, food processing, pharmaceuticals, construction materials, chemicals, cement, mining, machinery, steel, engineering, software and hardware, automobiles, motorcycle and auto parts, electronics, paper products, fertiliser, shrimp, defence products, shipbuilding
Ease-of-doing-business rank
107th (2013)[11]
External
Exports $25.05 billion (2013 est.)[12][13]
Export goods
textiles (garments, bed linen, cotton cloth, yarn), rice, leather goods, sports goods, chemicals, manufactures, carpets, steel, foodstuffs, fertilizer, Cement, sugar, animals, electrical equipment, petroleum and rugs
Main export partners
United States 13.3%
China 10.9%
United Arab Emirates 8.6%
Afghanistan 8.5% (2012 est.)[14]
Imports $33 billion (2013 est.) [15]
Import goods
petroleum, petroleum products, machinery, plastics, transportation equipment, edible oils, paper and paperboard, iron and steel, tea
Main import partners
China 19.8%
Saudi Arabia 12.0%
United Arab Emirates 11.9%
Kuwait 6.2% (2012 est.)[16]
Public finances
Public debt
62% of GDP (2013 est.)[17]
Revenues Rs 1939 billion ($19.39 billion) (2013)[18]
Expenses $39.3billion (2014-15)[19]
Credit rating
Standard & Poor's:[20]
B- (Domestic)
B- (Foreign)
B- (T&C Assessment)
Outlook: Stable[21]
Moody's:[21]
Caa1
Outlook: Stable[22]
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.
The economy of Pakistan is the 26th largest in the world in terms of purchasing power parity (PPP), and 44th largest in terms of nominal GDP. However as Pakistan has a population of over 186 million (the world's 6th-largest), thus GDP per capita is $3,149 ranking 140th in the world. Pakistan is a rapidly developing country[23][24][25] and is one of the Next Eleven, the eleven countries that, along with the BRICs, have a high potential to become the world's largest economies in the 21st century.[26] However, after decades of war and social instability, as of 2013, serious deficiencies in basic services such as railway transportation and electric power generation had developed.[27] The economy is semi-industrialized, with centres of growth along the Indus River.[28][29][30] Major industries includes textiles (garments, bed linen, cotton cloth, yarn), chemicals, food processing (mainly sugar, salt, wheat, rice, fruit), agriculture, fertilizer, cement, dairy and rugs.[citation needed]
Growth poles of Pakistan's economy are situated along the Indus River;[29][31] the diversified economies of Karachi and major urban centers in the Punjab, coexisting with lesser developed areas in other parts of the country.[29] The economy has suffered in the past from internal political disputes, a fast-growing population, mixed levels of foreign investment.[27] Foreign exchange reserves are bolstered by steady worker remittances, but a growing current account deficit – driven by a widening trade gap as import growth outstrips export expansion – could draw down reserves and dampen GDP growth in the medium term.[32] Pakistan is currently undergoing process economic liberalization with includes privatization of all government corporations, aimed to attract foreign investment and decrease budget deficit.[33] In 2014, foreign currency reserves crossed $15 billion which has led to stable outlook on the long-term rating by Standard & Poor's.[34][35]
Contents [hide]
1 Economic history
1.1 First five decades
1.2 Recent decades
1.3 Economic resilience
1.3.1 Background
1.4 Macroeconomic reform and prospects
1.4.1 Doing Business
2 The economy today
2.1 Stock market
2.2 Manufacturing and finance
2.3 Middle class
2.4 Poverty alleviation expenditures
2.5 Demographics
2.5.1 Employment
2.6 Tourism
2.7 Revenue
3 Currency system
3.1 Rupee
3.2 Foreign exchange rate
3.3 Foreign exchange reserves
4 Structure of economy
5 Wealth
6 Major Sectors
6.1 Primary
6.1.1 Agriculture
6.1.2 Mining
6.2 Secondary
6.2.1 Industry
6.2.2 Automotive industry
6.2.3 Construction material
6.2.4 Information Communication Technology Industry
6.2.5 Textiles
6.2.6 Other
6.3 Services
6.3.1 Communication
6.3.2 Transportation
6.3.3 Finance
6.3.4 Housing
6.3.5 Minor Sectors
6.3.6 Energy
6.3.7 Chemicals and pharmaceuticals
7 Foreign trade, remittances, aid, and investment
7.1 Investment
7.1.1 Foreign acquisitions and mergers
7.2 Foreign trade
7.2.1 Exports
7.3 External imbalances
7.4 Economic aid
7.5 Remittances
8 Government finances
8.1 Revenues and taxation
8.2 Expenditures (and the economic costs of War on Terror)
8.3 Sovereign bonds
9 Income distribution
10 See also
11 Further reading
12 References
13 External links
Economic history[edit]
Main article: Economic history of Pakistan
First five decades[edit]
Pakistan was a very poor and predominantly agricultural country when it gained independence in 1947. Pakistan's average economic growth rate in the first five decades (1947-1997) has been higher than the growth rate of the world economy during the same period. Average annual real GDP growth rates[36] were 6.8% in the 1960s, 4.8% in the 1970s, and 6.5% in the 1980s. Average annual growth fell to 4.6% in the 1990s with significantly lower growth in the second half of that decade. See also[37]
With a GDP growth rate of 6.8% during the 1960s, Pakistan was seen as a model of economic development around the world, and there was much praise for its economic progress. Karachi was seen as an economic role model around the world, and there was much praise for the way its economy was progressing.[citation needed] Many countries sought to emulate Pakistan's economic planning strategy and one of them, South Korea, copied the city's second "Five-Year Plan".[citation needed] Later, economic mismanagement in general, and fiscally imprudent economic policies in particular, caused a large increase in the country's public debt and led to slower growth in the 1970s and 1990s. The economy improved during the 1980s, with a GDP growth of 6.5%, a policy of economic deregulation, and an increased inflow of remittances from expatriate workers.[citation needed]
Recent decades[edit]
This is a chart of trend of gross domestic product of Pakistan at market prices estimated[38] by the International Monetary Fund with figures in millions of Pakistani Rupees. See also[37]
Year Gross Domestic Product US Dollar Exchange Inflation Index
(2000=100) Per Capita Income
(as % of USA)
1960 20,058 4.76 Pakistani Rupees 3.37
1965 31,740 4.76 Pakistani Rupees 3.40
1970 51,355 4.76 Pakistani Rupees 3.26
1975 131,330 9.91 Pakistani Rupees 2.36
1978 283,460 9.97 Pakistani Rupees 21 2.83
1985 569,114 16.28 Pakistani Rupees 30 2.07
1990 1,029,093 21.41 Pakistani Rupees 41 1.92
1995 2,268,461 30.62 Pakistani Rupees 68 2.16
2000 3,826,111 51.64 Pakistani Rupees 100 1.54
2005 6,581,103 59.86 Pakistani Rupees 126 1.71
Economic resilience[edit]
GDP Rate of Growth 1951–2009
Background[edit]
Historically, Pakistan's overall economic output (GDP) has grown every year since a 1951 recession. Despite this record of sustained growth, Pakistan's economy had, until a few years ago, been characterised as unstable and highly vulnerable to external and internal shocks. However, the economy proved to be unexpectedly resilient in the face of multiple adverse events concentrated into a four-year (1998–2002) period —
the Asian financial crisis;
economic sanctions – according to Colin Powell, Pakistan was "sanctioned to the eyeballs";[39]
The global recession of 2001–2002;
a severe drought – the worst in Pakistan's history, lasting about four years;
heightened perceptions of risk as a result of military tensions with India – with as many as 1 million troops on the border, and predictions of impending (potentially nuclear) war;
the post-9/11 military action in neighbouring Afghanistan, with a massive influx of refugees from that country;
Despite these adverse events, Pakistan's economy kept growing, and economic growth accelerated towards the end of this period. This resilience has led to a change in perceptions of the economy, with leading international institutions such as the IMF, World Bank, and the ADB praising Pakistan's performance in the face of adversity.[citation needed]
Macroeconomic reform and prospects[edit]
National Highways, Motorways & Strategic Roads of Pakistan.
According to many sources, the Pakistani government has made substantial economic reforms since 2000,[40] and medium-term prospects for job creation and poverty reduction are the best in nearly a decade.
Government revenues have greatly improved in recent years, as a result of economic growth, tax reforms – with a broadening of the tax base, and more efficient tax collection as a result of self-assessment schemes and corruption controls in the Central Board of Revenue – and the privatisation of public utilities and telecommunications. Pakistan is aggressively cutting tariffs and assisting exports by improving ports, roads, electricity supplies and irrigation projects. Islamabad has doubled development spending from about 2% of GDP in the 1990s to 4% in 2003, a necessary step towards reversing the broad underdevelopment of its social sector.[citation needed]
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