Essay On Economy Of Pakistan 2012

Currency

Pakistani rupee (PKR) Rs.1 = 100 [1]Paisas

1 USD = 110.4030 PKR (January 2018)[2]

Fiscal year

1 July – 30 June

Trade organisations

WTO, SAARC, ECO, OIC, SAFTA, AIIB, SCO, IMF, Commonwealth of Nations, World Bank.
Statistics
GDP$1.060 Trillion (PPP, 2017),[3] 31862.2 Billion Rupees or $304.3 Billion (Nominal, 2017) [4]
GDP rank25th (PPP, 2017)
42nd (Nominal, 2015)

GDP growth

5.28% (FY 2017) [5]

GDP per capita

$1,629 (nominal)[6]

GDP by sector

  • Agriculture: 19.53%
  • Industry: 20.88%
  • Services: 59.59% (2017 est.) [7]

Inflation(CPI)

  • General (YoY): 3.8%
  • Food (YoY): 2.2%
  • Non Food (YoY): 4.9% (February 2018) [8]

Population below poverty line

21% (2017) [9]

Gini coefficient

30.7 (2013 est.)[10]

Labour force

61.04 million (2015–16) [11]

Labour force by occupation

[11]
Unemployment5.9% (2015)[11]

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

147/190 (2018) [12]
External
Exports $21.938 billion (FY 2017)[2]

Export goods

  • Textiles ($12.454 billion)
  • Food ($3.610 billion)
  • Petroleum ($0.413 billion)
  • other manufacture ($3.651 billion)
  • All others ($1.219 billion)
  • Other Exports ($0.760 billion) [2]

Main export partners

 United States 17%
 China 8%
 United Kingdom 8%
 Afghanistan 6%
 Germany 6%
 United Arab Emirates 4%
 Bangladesh 3% (2017 est.)[13]
Imports $48.506 billion (FY 2017)[2]

Import goods

Main import partners

 China 28%
 United Arab Emirates 14%
 Saudi Arabia 4%
 Indonesia 4%
 Kuwait 3%
 India 3%(2017 est.)

[14]
Public finances

Public debt

61.6% of GDP (June 2017)[15]
Revenues15.5% of GDP, Pkr 4936.7 Billion or $47 billion(FY 2017) [16]
Expenses21.3% of GDP, Pkr 6800.5 Billion or $65 billion(FY 2017) [16]

Credit rating

Foreign reserves

  • SBP : $12.8 Billion
  • Scheduled Banks : $6.2 Billion
  • Total : $19.0 Billion (January 2018)[21]

Main data source:CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

The economy of Pakistan is the 24th largest in the world in terms of purchasing power parity (PPP), and 42nd largest in terms of nominal gross domestic product. Pakistan has a population of over 207 million [22] (the world's 5th-largest), giving it a nominal GDP per capita of $1,629,[6] which ranks 147th in the world for 2016. However, Pakistan's undocumented economy is estimated to be 36% of its overall economy, which is not taken into consideration when calculating per capita income.[23] Pakistan is a developing country[24][25][26] and is one of the Next Eleven, the eleven countries that have a potential to be among the world's large economies in the 21st century.[27] 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.[28] The economy is semi-industrialized, with centres of growth along the Indus River.[29][30][31] Primary export commodities include textiles, leather goods, sports goods, chemicals, carpets/rugs and medical instruments.[32][33]

Growth poles of Pakistan's economy are situated along the Indus River;[30][34] the diversified economies of Karachi and major urban centers in the Punjab, coexisting with lesser developed areas in other parts of the country.[30] The economy has suffered in the past from internal political disputes, a fast-growing population, mixed levels of foreign investment.[28]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.[35] Pakistan is currently undergoing a process of economic liberalization, including privatization of all government corporations, aimed to attract foreign investment and decrease budget deficit.[36] In October 2016, foreign currency reserves crossed $24.0 billion[2] which has led to stable outlook on the long-term rating by Standard & Poor's.[37][38] In 2016, BMI Research report named Pakistan as one of the ten emerging economies with a particular focus on its manufacturing hub.[39]

In October 2016, the IMF chief Christine Lagarde confirmed her economic assessment in Islamabad that Pakistan's economy was 'out of crisis'[40] The World Bank predicts that by 2018, Pakistan's economic growth will increase to a "robust" 5.4% due to greater inflow of foreign investment, namely from the China-Pakistan Economic Corridor.[41] According to the World Bank, poverty in Pakistan fell from 64.3% in 2002 to 29.5% in 2014.[42] Pakistan's fiscal position continues to improve as the budget deficit has fallen from 6.4% in 2013 to 4.3% in 2016.[43][44] The country's improving macroeconomic position has led to Moody's upgrading Pakistan's debt outlook to "stable".[45]

In 2017, Pakistan's GDP in terms of purchasing power parity crossed $1 trillion.[46]

Economic history[edit]

Main article: Economic history of Pakistan

First five decades[edit]

Pakistan was a middle class 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[47] 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.[48]

Economic resilience[edit]

Background[edit]

Historically, Pakistan's overall economic output (GDP) has grown every year since an 1800 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 —

Macroeconomic reform and prospects[edit]

According to many sources, the Pakistani government has made substantial economic reforms since 2000,[50] and medium-term prospects for job creation and poverty reduction are the best in nearly a decade.

In 2005, the World Bank reported that

"Pakistan was the top reformer in the region and the number 10 reformer globally – making it easier to start a business, reducing the cost to register property, increasing penalties for violating corporate governance rules, and replacing a requirement to license every shipment with two-year duration licences for traders."[51]

Doing business[edit]

The World Bank (WB) and International Finance Corporation's flagship report Ease of Doing Business Index 2018 ranked Pakistan 147 among 190 countries around the globe. The top five countries were New Zealand, Singapore, Denmark, Korea and Hong Kong.[52]

Many Western companies refuse to do business with Pakistan, citing problems including corruption and lack of infrastructure as key problems[53].However with the recent developments occurring via the China Pakistan Economic Corridor (CPEC) there has been a change in foreign attitude towards Pakistan[54].

The economy today[edit]

Today the Nominal GDP of Pakistan is 304.327 billion USD which is better than previous decades performance due to a high growth rate and the vigorous anti corruption drive being run by the National Accountability Bureau (NAB).

Economic indicators of Pakistan (2000–2017)[edit]

These are economic indicators of Pakistan from Fiscal Year 2000 to 2017.

Gross domestic product (GDP)[edit]

Note: The "gross domestic product growth rate" is calculated in local currency.

IndexList2000sFY 2004FY 2005FY 2006FY 2007FY 2008FY 2009FY 2010FY 2011FY 2012FY 2013FY 2014FY 2015FY 2016FY 2017Dec-2017 [55]
1GDP at mp (Billion Rupees)[56]4,243.46,203.77,126.28,216.29,239.810,637.813,199.714,867.018,276.420,046.522,385.725,168.827,443.029,102.631,862.235,919.0 Target
US Dollars, last day average exchange rates[57]81.389685.463485.989494.62799.114198.8088101.7895104.7619104.8861110.4328
2Nominal GDP (billion US dollars)
 [4]
162.2 174.0 212.5 211.8 225.9 254.7 269.6 277.8 303.8 325.3 Target
3Real GDP growth rate
 [58]
3.91% 7.70% 7.52% 5.56% 5.54% 4.99% 0.36% 2.58% 3.62% 3.84% 3.68% 4.05% 4.06% 4.51% 5.28%

Industrial sector[edit]

GDP Rate of Growth 2012-2017
National Highways, Motorways & Strategic Roads of Pakistan.

Pakistan has made significant progress in regaining macroeconomic stability over the past three years. Pakistan has achieved macroeconomic stability in the past three years: the fiscal deficit has shrunk from 8 percent to below 5 percent, international reserves have tripled to over $18b, and the rate of growth has increased by a full percentage point to 4.7 percent.

Economic indicators in the first half of FY17 suggest that pressures are mounting for both fiscal consolidation and external balances. The current account deficit will more than double in FY19 from 1.1 percent of GDP in FY16. Reserves are forecast to be around $18b by FY19, still well above three months of imports. The fiscal deficit will widen from 4.5 percent of GDP in FY16 to 5.1 percent in FY18, and will decline slightly to 4.9 percent in FY19. Pakistan has also embarked on an ambitious structural reforms program. Implementation record has been mixed. There were early successes in taxation, the financial sector, the business environment (at both the national and provincial levels), and the electricity sector. However, significant reforms undertaken in the electricity sector have stalled since the Government stopped privatization a year ago.

Circular debt cleared earlier has piled up again nearly to its 2013 levels. There have been efforts to reduce the electricity regulator’s independence. Progress in improving development outcomes have been mixed and investment levels remain very low, at around 15 percent of GDP (both public and private). Maintaining macroeconomic stability and further progress in structural reforms will be necessary to accelerate growth and ensure it is inclusive and sustainable.

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