Economy Overview of Pakistan:

Pakistan was a very poor and predominantly agricultural country when it gained independence in
1947 from Britain. Pakistan's average economic growth rate since independence has been higher
than the average growth rate of the world economy during the period. Average annual real GDP
growth rates[13] 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.

The economy of Pakistan is the 27th largest economy in the world in terms of purchasing power,
and the 45th largest in absolute dollar terms. Pakistan has a semi-industrialized economy, [6][7][8]
which mainly encompasses textiles, chemicals, food processing, agriculture and other industries.
Growth poles of Pakistan's economy are situated along the Indus River,[8][9] diversified economies
of Karachi and Punjab's urban centers, coexist with lesser developed areas in other parts of the
country.[8] The economy has suffered in the past from decades of internal political disputes, a fast
growing population, mixed levels of foreign investment, and a costly, ongoing confrontation with
neighboring India.

Background:
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 characterized 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";[17]
 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 neighboring 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.

After the highly destructive 2005 earthquake, Pakistan's economy kept expanding, growing by
over 7% in the twelve months ending June 30, 2006.

Pakistan emerged as one of the best performers in the wake of the global financial crisis, even as
the country waged a costly war against militants. Its domestically-driven economy was minimally
affected and its banking sector boasted surplus liquidity while remaining unharmed.

Macroeconomic Aspect:
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
privatization of public utilities and telecommunications.
Liberalization in the international textile trade has already yielded benefits for Pakistan's exports,
Pakistan's domestic natural gas production, and its significant use of CNG in automobiles, has
cushioned the effect of the oil-price shock of 2004-2005.

In 2005, the World Bank reported that

"Pakistan was the top reformer in the region and the number 10 reformer globally

Stock market:
In the first four years of the twenty-first century, Pakistan's KSE 100 Index was the best-
performing stock market index in the world as declared by the international magazine “Business
Week”.[citation needed] The stock market capitalisation of listed companies in Pakistan was valued at
$5,937 million in 2005 by the World Bank.[28]. But in 2008, after the General Elections, uncertain
political environment, rising militancy along western borders of the country, and mounting
inflation and current account deficits resulted in the steep decline of the Karachi Stock Exchange.
As a result, the corporate sector of Pakistan has declined dramatically in significance in recent
years.

Manufacturing and finance:

Pakistan's manufacturing sector has experienced double-digit growth in recent years, from 2000
to 2007, with large-scale manufacturing growing from a minimal 1.5% in 1999 to a record 19.9%
in 2004-05 and averaged 8.8% by end of 2007.[29].
The Federal Bureau of Statistics valued the finance and insurance sector at Rs.311,741 million in
2005 thus registering over 166% growth since 2000. A reduction in the fiscal deficit had resulted
in less government borrowing in the domestic money market, lower interest rates, and an
expansion in private sector lending to businesses and consumers.

Growing middle class:

Measured by purchasing power, Pakistan has a 30 million strong middle class, according to Dr.
Ishrat Husain, Ex-Governor (2 December 1999 - 1 December 2005) of the State Bank of Pakistan.
[30]
It is a figure that correlates with research by Standard Chartered Bank which estimates that
Pakistan possesses a "a middle class of 30 million people that Standard Chartered estimates now
earn an average of about $10,000 a year."

On measures of income inequality, the country ranks slightly better than the median. In
late 2006, the Central Board of Revenue estimated that there were almost 2.8 million
income-tax payers in the country.[35]

Revenue:
The Board of Revenue has collected nearly one trillion Rupees ($14.1 billion) in taxes in the
2007-2008 financial year.[42]
Structure of economy
The economy of the Islamic Republic of Pakistan is suffering with high inflation rates well above
26%. Over 1,081 patent applications were filed by non-resident Pakistanis in 2004 revealing a
new-found confidence.
Agriculture:

Pakistan is one of the world's largest producers and suppliers of the following according to the
2005 Food and Agriculture Organization of The United Nations and FAOSTAT

Pakistan ranks 5th in the muslim world and is the worlds 3rd largest milk producer.
Industry:

The government is privatizing large-scale parastatal units, and the public sector accounts for a
shrinking proportion of industrial output, while growth in overall industrial output (including the
private sector) has accelerated. Government policies aim to diversify the country's industrial base
and bolster export industries. Automobile, cement, textiles, Cng and IT Industries have grown
significantly in the past years.

Communication:
After deruglation of telecommunication industry, the sector has seen an exponential growth.
Pakistan Telecommunication Company Ltd has emerged as a successful Forbes 2000
conglomerate with over US $1 billion in sales in 2005. The mobile telephone market has
exploded fourteen-fold since 2000 to reach a subscriber base of 91 million users in 2008, one of
the highest mobile teledensities in the entire world. [

Pakistan is on the verge of a telecommunication revolution with the users increasing every day
and it is by far the most attractive business sector in paksitan in terms of foreign investments
coming in.

Electricity:
For years, the matter of balancing Pakistan's supply against the demand for electricity has
remained a largely unresolved matter. Pakistan faces a significant challenge in revamping its
network responsible for the supply of electricity. Lack of Dams and any effort done to improve.

Exports
Pakistan's exports increased more than 100% from $7.5 billion in 1999 to stand at $18 billion in
the financial year 2007-2008.

Economic aid:
Pakistan receives economic aid from several sources as loans and grants. The International
Monetary Fund (IMF), World Bank (WB), Asian Development Bank (ADB), etc. provides long
term loans to Pakistan. Pakistan also receives bilateral aid from developed and oil-rich countries.

Remittances:
The remittances of Pakistanis living abroad has played important role in Pakistan's economy and
foreign exchange reserves. The Pakistanis settled in Western Europe and North America are
important sources of remittances to Pakistan. Since 1973 the Pakistani workers in the oil rich
Arab states have been sources of billions dollars of remittances.
The 7 million strong Pakistani diaspora, contributed US$8 billion to the economy in 2008.

Government finances
 Fiscal year: 1 July - 30 June
 Budget outlay: Rs 3.259 trillion (FY2010/11)
 Revenues: $19.8 billion
 Expenditures:
 Debt - external: $50 billion (2010 est.)
 Economic aid - recipient: $1.2 billion (FY2010/11)