Pakistan

Capital: Islamabad

Local time:
It is %T:%M %A in Islamabad

Exchange rate on :

GDP growth rate: 4.500% in 2012

FDI inward stock: 17 789 million USD in 2009

Country risk: See the country risk analysis from Pakistan provided by Ducroire.

Economic trends

The GDP 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 privatizing state-subsidized services, instituting an anti-money laundering law, increasing the harshness of punishment against the piracy of intellectual property and the quick resolution of disputes between investors. In the fight against terrorism, the country has received substantial financial aid from the United States, a significant factor for growth and economic stability. However, at the end of the payments in October, Pakistan asked the IFM's help in November, and adopted a stabilization plan whose results are limited. Despite a slight improvement, the country remains confronted by a number of difficulties: the slowing down of the economy, the budget deficit and insufficient growth of tax receipts. High international oil barrel prices, inflation, prices of raw materials, a deficit balance of payments and political insecurity and uncertainty remain some of the biggest threats to the economy.

The main country indicators are in the red. Approximately 30% of the population lives below the poverty line. The unemployment level is estimated at around 7.5% and the level of under-employment is very high. Life expectancy is only 64 years and only 55% of the population is literate. Extreme poverty and under-development are major problems in Pakistan, and especially in rural areas. 

Main branches of industry

The agricultural sector is the main pillar of the Pakistani economy. It contributes around 22% of the GDP and employs approximately 42% of the active population. Wheat, rice, cotton, sugarcane, fruits, vegetables and tobacco are the chief crops. Livestock farming is also very important. Pakistan is the 4th biggest cotton producer in the world and has abundant natural resources, mainly copper, oil and gas. 

The industrial sector contributes around 25% of the GDP. The major industries are textile production (the biggest earner of foreign exchange), oil refining, metal processing, and the production of cement and fertilizer. Maritime transport is also a significant activity.

The tertiary sector contributes around half of the GDP. Remittances from Pakistanis working abroad are a considerable financial godsend for the country.

International trade

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 budget year, the trade volume decreased by 9%. After having more than doubled between 2001/02 and 2007/08, Pakistani exports declined by 6% in 2008/09, compared to the same period of the previous year. Imports, which were multiplied by three between 2003 and 2008, declined by 10.5% in 2008/09, compared to 2007/08. The fall in imports led to a 17% reduction of the trade deficit in 2008/09, compared to 2007/08.

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 import partners are Saudi Arabia, the United Arab Emirates and China. Pakistan mainly imports fuels, oil, vehicles, iron and steel.