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Pakistan Monument

Economic Profile

Pakistan has a high potential for economic growth, due to its favorable geographical location with a bridge between Central and South Asia as well as between China and the Arabian Sea, its wealth of natural resources, low labor costs, a young, growing population and a burgeoning middle class. But this potential is not fully exploited due to decades of neglect of social and economic infrastructure, periodically recurring political instability and weak institutional capacity.


The GDP growth rate of Pakistan has consistently been in the high single digits throughout its history. However, the spillover effects from the Afghan War in the form of radical militant outfits that have set up shop in the country by coming through a very porous border, have reduced the growth rate which has hovered around the 2-4 percent mark in recent years. Strong economic indicators of the past two years is pushing it to break the 5 percent in this financial year. The GDP currently stands at 930 billion USD, with a per capita income of 5,000 USD, making Pakistan the 26th biggest economy in the world.


According to State Bank of Pakistan, the inflation rate fell from 11 percent in fiscal year 2012/13 to 8.7 percent in 2013/14 and finally to 4.8 percent in fiscal year 2014/15. The budget deficit of 5.8 percent of GDP in financial year 2013/14 was also reduced to 5.0 percent in the past financial year. The public debt of Pakistan is around 62 percent of GDP. Loss-making state-owned enterprises, including Pakistan Railways, Pakistan International Airlines, Pakistan Steel, are having a significant impact on public finances and require regular government financial injections. The foreign reserves of the Central Bank currently stand at about 14 billion US dollars.


Agriculture, with a contribution of about 58 percent to the gross domestic product. is still in many ways the most important sector of Pakistan's economy. About 44 percent of the working population are employed in agriculture; almost 55 percent of the rural population depend directly or indirectly on the agricultural sector. The Punjab province, in many areas (including cereal crops and livestock) is the world's largest producer and has the largest contiguous agricultural irrigation area worldwide.


The industrial sector contributes 21 percent to the gross domestic product. By far the biggest export sector is the textile industry, which accounts for about 65 percent of Pakistan's export earnings. The service sector has become an important growth factor too; it now accounts for about 21 percent of gross domestic product. Key areas here are mainly banking, insurance, transportation and communications sector.


The chief exports of Pakistan are textiles, surgical goods, agricultural commodities, pharmaceuticals, machinery, and sports goods. The main imports are petroleum products, chemicals, vehicle parts, fertilizers and edible oil. The major trading partners of the country are United States, UK, European Union, ASEAN countries, Saudi Arabia and China.



Why invest in Pakistan?

  • Pakistan has one of the most strategic location in the Asian continent. It is located centrally and has proximity to warm waters, makes it the shortest possible export route for Central Asian countries, as well as Western China. In addition, it conveniently located between the financial liquid, Gulf States and the economic powers of the Far East.
  • Work has begun on the China-Pakistan Economic Corridor which would allow for Pakistan to become a regional trading hub for the world’s largest economy.
  • Pakistan’s economy is very resilient and has consistently been ranked by the Word Bank as being one of the most resilient in the world, ahead of countries like Russia, Indonesia, Brazil and India.
  • 55 percent of Pakistan’s population is below the age of 19 (PakCensus), which allows for considerable room for future economic growth.
  • Pakistan’s skilled workforce is one of the best in the region due to its industrious nature. Also, the medium of education from secondary to higher is English which allows for the local workforce to be proficient in the global language and communicate effectively.
  • Pakistan has a population of 180 million, 43 percent of which belong to the mid-to-upper income segment. This bodes well for any company looking to invest in the consumer goods and services sector.