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Pakistan Economy
 
 
 

General

Pakistan is a rapidly developing country and is one of the Next Eleven, the eleven countries (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea and Vietnam) that, along with the BRICs (Brazil, Russia, India and China), have a high potential to become the world's largest economies in the 21st century. The economy is semi-industrialised, with centres of growth along the Indus River. The diversified economies of Karachi and Punjab's urban centres coexist with less developed areas in other parts of the country. Pakistan's estimated nominal GDP as of 2011 is $202 billion. The GDP by PPP is $488.6 billion. The estimated nominal per capita GDP is $1,197, GDP (PPP) per capita is $2,851 (international dollars), and debt-to-GDP ratio is 55.5%. A 2010 report by RAD-AID positioned Pakistan's economy at 27th largest in the world by purchasing power and 45th largest in absolute dollars. It is South Asia's second largest economy, representing about 15% of regional GDP.

Pakistan's economic growth since its inception has been varied. It has been slow during periods of civilian rule, but excellent during the three periods of military rule, although the foundation for sustainable and equitable growth was not formed. The early to middle 2000s was a period of rapid reform; the government raised development spending, which reduced poverty levels by 10% and increased GDP by 3%. The economy cooled again from 2007. Inflation reached 25% in 2008 and Pakistan had to depend on an aggressive fiscal policy backed by the International Monetary Fund to avoid possible bankruptcy. A year later, the Asian Development Bank reported that Pakistan's economic crisis was easing. The inflation rate for the fiscal year 2010-11 was 14.1%.

Pakistan is one of the largest producers of natural commodities, and its labour market is the 10th largest in the world. Around 600,000 Pakistanis went abroad to work in 2009. Expatriate workers send remittances of close to $8 billion annually, the largest source of foreign exchange apart from exports. According to the World Trade Organisation, Pakistan's share of overall world exports is declining; it contributed only 0.128% in 2007. The trade deficit in the fiscal year 2010-11 was $11.217 billion.

The structure of the Pakistani economy has changed from a mainly agricultural to a strong service base. Even so, according to the United Nations Food & Agriculture Organisation, Pakistan produced 21,591,400 metric tons of wheat in 2005, more than all of Africa (20,304,585 metric tons) and nearly as much as all of South America (24,557,784 metric tons). Between 2002 and 2007 there was substantial foreign investment in Pakistan's banking and energy sectors. Other important industries include clothing and textiles (accounting for nearly 60% of exports), food processing, chemicals manufacture, iron and steel.

Tourism in Pakistan has been stated as being the tourism industry's "next big thing". Pakistan's tourism industry was in its heyday during the 1970s when the country received unprecedented amounts of foreign tourists, thanks to the 'Hippie Trail'. The main destinations of choice for these tourists were the Khyber Pass, Peshawar, Karachi, Lahore, Swat, Quetta, Gwadar and Rawalpindi. Although there is great potential for tourism in Pakistan, but it is severely affected by the country's instability.

Overview

Economy - overview : Decades of internal political disputes and low levels of foreign investment have led to slow growth and underdevelopment in Pakistan. Agriculture accounts for more than one-fifth of output and two-fifths of employment. Textiles account for most of Pakistan's export earnings, and Pakistan's failure to expand a viable export base for other manufactures has left the country vulnerable to shifts in world demand. Official unemployment is 6%, but this fails to capture the true picture, because much of the economy is informal and underemployment remains high. Over the past few years, low growth and high inflation, led by a spurt in food prices, have increased the amount of poverty - the UN Human Development Report estimated poverty in 2011 at almost 50% of the population. Inflation has worsened the situation, climbing from 7.7% in 2007 to more than 13% for 2011, before declining to 9.3% at year-end. As a result of political and economic instability, the Pakistani rupee has depreciated more than 40% since 2007. The government agreed to an International Monetary Fund Standby Arrangement in November 2008 in response to a balance of payments crisis. Although the economy has stabilised since the crisis, it has failed to recover. Foreign investment has not returned, due to investor concerns related to governance, energy, security, and a slow-down in the global economy. Remittances from overseas workers, averaging about $1 billion a month since March 2011, remain a bright spot for Pakistan. However, after a small current account surplus in fiscal year 2011 (July 2010/June 2011), Pakistan's current account turned to deficit in the second half of 2011, spurred by higher prices for imported oil and lower prices for exported cotton. Pakistan remains stuck in a low-income, low-growth trap, with growth averaging 2.9% per year from 2008 to 2011. Pakistan must address long standing issues related to government revenues and energy production in order to spur the amount of economic growth that will be necessary to employ its growing population. Other long term challenges include expanding investment in education and healthcare, and reducing dependence on foreign donors.
GDP (purchasing power parity) : $488.4 billion (2011 est.)
GDP (official exchange rate) : $206.9 billion (2011 est.)
GDP - real growth rate : 3% (2011 est.)
GDP - per capita (PPP) : $2,800 (2011 est.)
GDP - composition by sector : agriculture: 21.6%
industry: 24.9%
services: 53.4% (2011 est.)
Labour force : 58.64 million
note: extensive export of labour, mostly to the Middle East, and use of child labour (2011 est.)
Labour force - by occupation : agriculture: 45%
industry: 20.1%
services: 34.9% (2010 est.)
Unemployment rate : 5.6% (2011 est.)
note: substantial underemployment exists
Population below poverty line : 22.3% (FY05/06 est.)
Household income or consumption by percentage share
: lowest 10%: 9.9%
highest 10%: 39.3% (FY07/08)
Distribution of family income - Gini index : 30.6 (FY07/08)
Investment (gross fixed) : 11.5% of GDP (2011 est.)
Budget : revenues: $26.18 billion
expenditures: $40.02 billion (2011 est.)
Taxes and other revenues
: 12.7% of GDP (2011 est.)
Budget surplus (+) or deficit (-)
: -6.7% of GDP (2011 est.)
Public debt
: 60.1% of GDP (2011 est.)
Inflation rate (consumer prices)
: 11.9% (2011 est.)
Central bank discount rate
: 12% (31 January 2012 est.)
Commercial bank prime lending rate : 14.12% (31 December 2011 est.)
Stock of narrow money : $56.34 billion (31 December 2011 est.)
Stock of broad money : $76.16 billion (31 December 2011 est.)
Stock of domestic credit : $86.19 billion (31 December 2011 est.)
Market value of publicly traded shares : $32.76 billion (31 December 2011)
Agriculture - products : cotton, wheat, rice, sugar cane, fruits, vegetables; milk, beef, mutton, eggs
Industries : textiles and apparel, food processing, pharmaceuticals, construction materials, paper products, fertiliser, shrimp
Industrial production growth rate : 3% (2011 est.)
Electricity - production : 93.35 billion kWh (2010 est.)
Electricity - consumption : 74.35 billion kWh (2010 est.)
Electricity - exports : 0 kWh (2011 est.)
Electricity - imports : 0 kWh (2010 est.)
Crude Oil - production : 63,080 bbl/day (2011 est.)
Crude Oil - exports : 0 bbl/day (2009 est.)
Crude Oil - imports : 183,000 bbl/day (2009 est.)
Crude Oil - proved reserves : 280.7 million bbl (1 January 2012 est.)
Refined petroleum products - production : 215,900 bbl/day (2008 est.)
Refined petroleum products - consumption : 426,700 bbl/day (2011 est.)
Refined petroleum products - exports : 26,830 bbl/day (2008 est.)
Refined petroleum products - imports : 195,700 bbl/day (2008 est.)
Natural gas - production : 42.9 billion cu m (2011 est.)
Natural gas - consumption : 42.9 billion cu m (2011 est.)
Natural gas - exports : 0 cu m (2010 est.)
Natural gas - imports : 0 cu m (2010 est.)
Natural gas - proved reserves : 753.8 billion cu m (1 January 2012 est.)
Current account balance :
Exports : $26.3 billion (2011 est.)
Exports - commodities : textiles (garments, bed linen, cotton cloth, yarn), rice, leather goods, sports goods, chemicals, manufactures, carpets and rugs
Exports - partners : US 14.3%, UAE 7.6%, Afghanistan 7.5%, China 7.5%, Germany 5%, UK 4.1% (2011)
Imports : $38.93 billion (2011 est.)
Imports - commodities : petroleum, petroleum products, machinery, plastics, transportation equipment, edible oils, paper and paperboard, iron and steel, tea
Imports - partners : China 18.2%, Saudi Arabia 11.4%, UAE 11.3%, Kuwait 5.9%, Malaysia 5.5%, US 4.3%, Singapore 4% (2011)
Reserves of foreign exchange and gold : $18.09 billion (2011 est.)
Debt - external : $58.27 billion (31 December 2011 est.)
Stock of direct foreign investment - at home : $21.88 billion (31 December 2011 est.)
Stock of direct foreign investment - abroad : $1.432 billion (31 December 2011 est.)
Exchange rates : Pakistani rupees (PKR) per US dollar - 86.343 (2011 est.); 85.194 (2010 est.); 81.71 (2009); 70.64 (2008); 60.6295 (2007)
Fiscal year : 1 July-30 June
 

 
 

 



 


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