Pakistan: Economy#
Decades of internal political disputes and low levels of foreign investment have led to slow growth and underdevelopment in Pakistan. Pakistan has a large English-speaking population. Nevertheless, a challenging security environment, electricity shortages, and a burdensome investment climate have deterred investors. Agriculture accounts for more than one-fourth of output and two-fifths of employment. Textiles and apparel account for most of Pakistan's export earnings, and Pakistan's failure to diversify its exports has left the country vulnerable to shifts in world demand. Pakistan’s GDP growth has gradually increased since 2012. Official unemployment was 6.5% in 2015, but this fails to capture the true picture, because much of the economy is informal and underemployment remains high. Human development continues to lag behind most of the region.In coordination with the International Monetary Fund (IMF), Pakistan embarked on an economic reform program in 2013. While the reform process has been mixed, and issues like privatization of state-owned enterprises remain unresolved, Pakistan has restored macroeconomic stability, improved its credit rating, and boosted growth. The Pakistani rupee, after heavy depreciation, remained relatively stable against the US dollar in 2014-15. Remittances from overseas workers, averaging more than $1.5 billion a month, are a key revenue source for Pakistan, partly compensating for a lack of foreign investment and a slowdown in portfolio investment. Falling global oil prices in 2015 contributed to a narrowing current account deficit and lower inflation, despite weak export performance. Pakistan’s program with the IMF – a three-year, $6.7 billion Extended Fund Facility focusing on reducing energy shortages, stabilizing public finances, expanding revenue, and improving the external balance – is slated to conclude in September 2016. While passing most quantitative targets, Pakistan has missed targets on structural reforms and performance criteria throughout the program.
Pakistan remains stuck in a low-income, low-growth trap, with growth averaging about 3.5% per year from 2008 to 2013. Pakistan must address long-standing issues related to government revenues, with the tax base being narrow at 11% of GDP. Given demographic challenges, Pakistan’s leadership will be pressed to implement economic reforms, promote further development of the energy sector, and attract foreign investment to support sufficient economic growth necessary to employ its growing and rapidly urbanizing population, much of which is under the age of 25. Other long-term challenges include expanding investment in education and healthcare, adapting to the effects of climate change and natural disasters, improving the country’s business climate, and reducing dependence on foreign donors. Pakistan and China are implementing the "China-Pakistan Economic Corridor", a $46 billion investment program targeted towards the energy sector and other infrastructure project that Islamabad and Beijing had agreed on in early 2014.
Economic Facts#
| GDP (purchasing power parity) | $988.2 billion (2016 est.) $943.8 billion (2015 est.) $907.2 billion (2014 est.) note: data are in 2016 dollars ++ data are for fiscal years |
|---|---|
| GDP (official exchange rate) | $271.1 billion (2015 est.) |
| GDP - real growth rate | 4.7% (2016 est.) 4% (2015 est.) 4.1% (2014 est.) note: data are for fiscal years |
| GDP - per capita (PPP) | $5,100 (2016 est.) $5,000 (2015 est.) $4,900 (2014 est.) note: data are in 2016 dollars ++ data are for fiscal years |
| Gross national saving | 14.3% of GDP (2016 est.) 14.5% of GDP (2015 est.) 13.4% of GDP (2014 est.) note: data are for fiscal years |
| GDP - composition, by end use | household consumption: 80.1% government consumption: 11.8% investment in fixed capital: 13.6% investment in inventories: 1.6% exports of goods and services: 8.7% imports of goods and services: -15.8% (2016 est.) |
| GDP - composition, by sector of origin | agriculture: 25.2% industry: 19.2% services: 55.6% (2016 est.) |
| Agriculture - products | cotton, wheat, rice, sugarcane, fruits, vegetables; milk, beef, mutton, eggs |
| Industries | textiles and apparel, food processing, pharmaceuticals, construction materials, paper products, fertilizer, shrimp |
| Industrial production growth rate | 6.8% (2016 est.) |
| Labor force | 65.1 million note: extensive export of labor, mostly to the Middle East, and use of child labor (2016 est.) |
| Labor force - by occupation | agriculture: 43.7% industry: 22.4% services: 33.9% (FY2013 est.) |
| Unemployment rate | 6.7% (2016 est.) 6.4% (2015 est.) note: substantial underemployment exists |
| Population below poverty line | 22.3% (FY2005 est.) |
| Household income or consumption by percentage share | lowest 10%: 4.2% highest 10%: 25.6% (FY2011) |
| Distribution of family income - Gini index | 29.6 (FY2011) 31.4 (FY2008) |
| Budget | revenues: $41.77 billion expenditures: $54.63 billion note: data are for fiscal years (2016 est.) |
| Taxes and other revenues | 15.4% of GDP (2016 est.) |
| Budget surplus (+) or deficit (-) | -4.7% of GDP (2016 est.) |
| Public debt | 58.5% of GDP (2016 est.) 57.3% of GDP (2015 est.) |
| Fiscal year | 1 July - 30 June |
| Inflation rate (consumer prices) | 3.7% (2016 est.) 2.5% (2015 est.) |
| Central bank discount rate | 6% (15 November 2015) 9.5% (18 December 2014) |
| Commercial bank prime lending rate | 6.9% (31 December 2016 est.) 8.37% (31 December 2015 est.) |
| Stock of narrow money | $100.2 billion (31 December 2016 est.) $89.3 billion (31 December 2015 est.) |
| Stock of broad money | $122.3 billion (31 December 2016 est.) $109.8 billion (31 December 2015 est.) |
| Stock of domestic credit | $142.2 billion (31 December 2016 est.) $127.5 billion (31 December 2015 est.) |
| Market value of publicly traded shares | $43.68 billion (31 December 2012 est.) $32.76 billion (31 December 2011 est.) $38.17 billion (31 December 2010 est.) |
| Current account balance | -$2.627 billion (2015 est.) -$2.627 billion (2015 est.) |
| Exports | $20.96 billion (2016 est.) $22.73 billion (2015 est.) |
| Exports - commodities | textiles (garments, bed linen, cotton cloth, yarn), rice, leather goods, sporting goods, chemicals, manufactures, carpets and rugs |
| Exports - partners | US 13.1%, UAE 9.1%, Afghanistan 9.1%, China 8.8%, UK 5.4%, Germany 4.9% (2015) |
| Imports | $38.25 billion (2016 est.) $39.29 billion (2015 est.) |
| Imports - commodities | petroleum, petroleum products, machinery, plastics, transportation equipment, edible oils, paper and paperboard, iron and steel, tea |
| Imports - partners | China 28.1%, Saudi Arabia 10.9%, UAE 10.8%, Kuwait 5.6% (2015) |
| Reserves of foreign exchange and gold | $20.53 billion (31 December 2016 est.) $20.05 billion (31 December 2015 est.) |
| Debt - external | $64.04 billion (31 December 2016 est.) $60.91 billion (31 December 2015 est.) |
| Stock of direct foreign investment - at home | $33.82 billion (31 December 2016 est.) $31.82 billion (31 December 2015 est.) |
| Stock of direct foreign investment - abroad | $2.059 billion (31 December 2016 est.) $2.009 billion (31 December 2015 est.) |
| Exchange rates | Pakistani rupees (PKR) per US dollar - 105.1 (2016 est.) 102.769 (FY2015 est.) 102.769 (FY2014 est.) 101.1 (FY2013 est.) 93.4 (2012 est.) |