Pakistan: Economic and Political Outline
Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline
The GDP's growth rate remained positive despite the international economic crisis, thanks to the positive results of the agricultural sector.
In recent years, the government made significant macro-economic reforms, which include the privatization of state-subsidized services, the institution of an anti-money laundering law, an increase in the harshness of punishment against the piracy of intellectual property and quick settlements for the disputes between investors. In the context of the fight against terrorism, the country has received substantial financial aid from the United States, an important factor for growth and economic stability. However, when this payments reached their end in October 2008, Pakistan asked aid from the IMF in November, and adopted a stabilization plan which has obtained limited results. Despite a slight improvement, the country remains confronted with several difficulties: economic slowdown, budgetary deficit and insufficient growth of tax receipts. Some of the major threats to Pakistan's economy are: international high prices in oil barrels, inflation, raw materials prices, a deficit on the balance of payments and political insecurity and uncertainty.
The main indicators of the country are in the red. Approximately 30% of the population lives below the poverty line. The unemployment rate is estimated at around 7.5% and the level of under-employment is very high. Life expectancy is only 64 years and barely 55% of the population is literate. Extreme poverty and under-development are major problems in Pakistan, especially in rural areas.
The perspectives of growth for 2011 are expected to be low due to the strong floods that devastated the country in 2010. Thousands of agricultural workers lost their jobs and the cost of reconstruction is estimated at USD 15 billion.
| Main Indicators | 2009 | 2010 | 2011 | 2012 (e) | 2013 (e) |
| GDP (billions USD) | 161.82 | 176.87 | 204.08 | 233.76 | 248.02 |
| GDP (Constant Prices, Annual % Change) | 1.7 | 3.8e | 2.6 | 3.8 | 4.5 |
| GDP per Capita (USD) | 962 | 1,030e | 1,164 | 1,307 | 1,359 |
| General Government Gross Debt (in % of GDP) | 57.4 | 56.8 | 57.6e | 57.3 | 56.5 |
| Inflation Rate (%) | 20.8 | 11.7e | 13.9e | 14.0 | 12.0 |
| Unemployment Rate (% of the Labor Force) | 6.2 | 6.2 | 6.2 | 6.2 | 6.2 |
| Current Account (billions USD) | -9.26 | -3.95e | 0.44 | -3.88 | -5.18 |
| Current Account (in % of GDP) | -5.7 | -2.2 | 0.2 | -2.1 | - |
Source: IMF - World Economic Outlook Database ; World Bank , Last Available Data
Note: (e) Estimated Data
The agricultural sector is the main pillar of the Pakistani economy. It contributes around 22% to the GDP and employs approximately 42% of the active population. Wheat, rice, cotton, sugarcane, fruits, vegetables and tobacco are the chief crops. Cattle livestock farming is also very important. Pakistan is the 4th largest cotton producer in the world and has abundant natural resources, mainly copper, oil and gas.
The industrial sector contributes around 25% to the GDP. The major industries are textile production (the largest source of foreign exchange revenue), oil refining, metal processing, and the production of cement and fertilizers. Maritime transport is also a significant activity.
The tertiary sector contributes to around half of the GDP. Money transfers from Pakistanis working abroad create a considerable godsend financial income for the country.
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Employment By Sector (in % of Total Employment) | 44.7 | 20.1 | 35.2 |
| Value Added (in % of GDP) | 21.8 | 23.6 | 54.6 |
| Value Added (Annual % Change) | 2.0 | 4.9 | 4.6 |
Source: World Bank - Last Available Data.
| Monetary Indicators | 2006 | 2007 | 2008 | 2009 | 2010 |
| Pakistani Rupee (PKR) - Average Annual Exchange Rate For 1 USD | 60.27 | 60.74 | 70.41 | 81.71 | 85.19 |
Source: World Bank - Last Available Data.
Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation
See the Country Risk Analysis Provided By Ducroire.
Despite its economic and political difficulties, Pakistan has taken steps to liberalize its trade and investments in the context of commitments made with the WTO, IMF, and the World Bank. The share of foreign trade in the country’s GDP is around 35%. The drop in global demand has resulted in a high trade deficit.
In the 2008/09 fiscal year, the trade volume decreased by 9%. After having more than doubled between 2007 and 2008, Pakistani exports declined by 6% in 2008/09. Imports declined by 10.5% in 2008/09 compared to 2007/08. The fall in imports led to a reduction of 17% on the trade deficit in 2008/09, compared to 2007/08. During the fiscal year 2009/2010, exports reached the amount of USD 15.9 billion and its main trade partner was the United States.
Pakistan's three main customers are the United States, the United Arab Emirates and Afghanistan. The main export commodities are cotton, textiles, clothing and cereals. Its three main import partners are Saudi Arabia, the United Arab Emirates and China. Pakistan mainly imports fuels, oil, vehicles, iron and steel.
| Foreign Trade Indicators | 2006 | 2007 | 2008 | 2009 | 2010 |
| Imports of Goods (million USD) | 29,825 | 32,590 | 42,329 | 31,668 | 37,810 |
| Exports of Goods (million USD) | 16,930 | 17,838 | 20,323 | 17,523 | 21,515 |
| Imports of Services (million USD) | 8,094 | 8,426 | 9,286 | 5,902 | 6,414 |
| Exports of Services (million USD) | 2,245 | 2,224 | 2,531 | 2,548 | 2,757 |
| Imports of Goods and Services (Annual % Change) | 18.7 | -3.5 | 3.5 | -15.2 | 11.2 |
| Exports of Goods and Services (Annual % Change) | 9.9 | 2.3 | -5.3 | -3.3 | 14.1 |
| Imports of Goods and Services (in % of GDP) | 23.2 | 21.3 | 23.9 | 20.4 | 19.0 |
| Exports of Goods and Services (in % of GDP) | 15.2 | 14.2 | 12.9 | 12.8 | 12.9 |
| Trade Balance (million USD) | 9,647 | 10,587 | -17,003 | 10,270 | 11,416 |
| Trade Balance (Including Service) (million USD) | -14,559 | 15,631 | -22,457 | -12,838 | 12,094 |
| Foreign Trade (in % of GDP) | 38.5 | 35.5 | 36.7 | 33.2 | 31.9 |
Source: WTO - World Trade Organization ; World Bank , Last Available Data
| Main Customers (% of Exports) |
2010 |
| United States | 17.2% |
| United Arab Emirates | 8.6% |
| Afghanistan | 7.9% |
| China | 6.7% |
| United Kingdom | 5.2% |
| See More Countries | 54.5% |
| Main Suppliers (% of Imports) |
2010 |
| United Arab Emirates | 14.0% |
| China | 14.0% |
| Saudi Arabia | 10.2% |
| Kuwait | 6.9% |
| Malaysia | 5.5% |
| See More Countries | 49.4% |
Source: Comtrade, Last Available Data
Source: Comtrade, Last Available Data
Note: Name and alliances of political parties in Pakistan keep on changing frequently.
Source: Worldwide Press Freedom Index 2010, Reporters Without Borders
Map of freedom 2010
Source: Freedom House
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Last Updates: January 2012