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flag Pakistan Pakistan: Economic and Political Outline

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

 

Economic Indicators

The GDP's growth rate remained positive despite the international economic crisis of 2008-2009, 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 and adopted a stabilization plan which has obtained limited results. Despite a slight improvement, the country remains confronted with several difficulties: economic slowdown (insufficient 2012 and 2013 growth rates to cope with the country's demographic challenges), budgetary deficit (8% of GPD in 2013) and insufficient growth of tax receipts. 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.

Since 2011, economic activity has not been sufficient to meet the challenges facing the Pakistani society. Growth has been increasing from 4.4% in 2012 to 3.6% in 2013, inflation decreased in 2013 at 7.4% after 11% in 2012. The decrease in industrial production only testifies to the lack of investment and the chronic shortage of energy supply. The unemployment rate reached 6% in 2013. Life expectancy is only 65 years and less than 55% of the population is literate. Moreover, the increasing poverty (over 22% of the population lived below the poverty line in 2013) is the direct result of these economic difficulties and of problems of governance. Extreme poverty and underdevelopment are major problems, especially in rural areas. Lastly, the country's public debt stood at 66.2% of GDP in 2013, in slight increase compare to 2012.

The perspectives of growth for 2014 are at around 2.7% and  the country's economic situation therefore remains fragile and uncertain.

 
Main Indicators 20112012201320142015 (e)
GDP (billions USD) 213.63225.06232.76--
GDP (Constant Prices, Annual % Change) 3.63.83.74.14.3
GDP per Capita (USD) 1,2191,2581e--
General Government Gross Debt (in % of GDP) 59.564.064.363.7e63.1
Inflation Rate (%) 13.711.07.48.68.0
Unemployment Rate (% of the Labor Force) 6.06.56.26.86.5
Current Account (billions USD) 0.21-4.66-2.50--
Current Account (in % of GDP) 0.1-2.1-1.1-1.2e-1.3

Source: IMF - World Economic Outlook Database , Last Available Data

Note: (e) Estimated Data

Main Sectors of Industry

The agricultural sector is the main pillar of the Pakistani economy. It contributes 20% to the GDP and employs 45% 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 has contributed to 26% to the GDP in 2013. 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 (54% in 2013) and employs around 35% of the active population.  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) 43.7 21.5 33.2
Value Added (in % of GDP) 25.1 21.1 53.8
Value Added (Annual % Change) 2.9 1.4 4.9

Source: World Bank - Last Available Data.

 
 
 
Monetary Indicators 20092010201120122013
Pakistani Rupee (PKR) - Average Annual Exchange Rate For 1 USD 81.7185.1986.3493.40101.63

Source: World Bank - Last Available Data.

 
 

Learn more about Market Analyses about Pakistan on Globaltrade.net, the Directory for International Trade Service Providers.

Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
55.2/100
Position:
Mostly Unfree
World Rank:
126/178
Regional Rank:
25/25

Distribution of Economic freedom in the world
Source: 2014 Index of Economic freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
5.11
World Rank:
74/82

Source: The Economist - Business Environment Rankings 2014-2018

 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

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 during 2008-9 resulted since then in a series of high trade deficits.

Pakistan's main customers in 2013 were the EU, the United States, the United Arab Emirates, China and Afghanistan. The EU is purchasing around 25% of all Pakistan exports (70% of textile exports in 2013). The main export commodities are cotton, textiles, clothing and cereals.

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

60 years after the establishment of diplomatic relations between the two countries, Pakistan and China continue to share the same strategic issue: how to counterbalance the Indian hegemony in Southern Asia. In addition to military cooperation, trade and investment also play a role and China's place as Pakistan's trading partner is becoming gradually more important.

Turkey, Saudi Arabia, Iran and the Golf countries are also among the country's largest trading partners.

The degradation of international trade will again impact - as it did in 2013 - through a slow down in export in 2014. This will further deepens the trade deficit.

 
Foreign Trade Indicators 20092010201120122013
Imports of Goods (million USD) 31,66837,80744,01244,15744,698
Exports of Goods (million USD) 17,52321,41025,38324,56725,150
Imports of Services (million USD) 5,9026,4807,2377,3086,831
Exports of Services (million USD) 2,5482,9493,3933,1813,217
Imports of Goods and Services (Annual % Change) -15.94.3-0.1-3.11.6
Exports of Goods and Services (Annual % Change) -3.415.72.4-15.013.6
Imports of Goods and Services (in % of GDP) 19.719.419.020.419.9
Exports of Goods and Services (in % of GDP) 12.413.514.012.413.2
Trade Balance (million USD) -10,179-11,360-12,544-15,594-15,963
Trade Balance (Including Service) (million USD) -12,838-11,960-15,567-17,522-18,977
Foreign Trade (in % of GDP) 32.132.932.932.833.1

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2013
United States 14.9%
China 10.6%
Afghanistan 8.0%
United Arab Emirates 7.1%
United Kingdom 5.7%
See More Countries 53.8%
Main Suppliers
(% of Imports)
2013
United Arab Emirates 17.7%
China 15.1%
Kuwait 9.0%
Saudi Arabia 8.8%
Japan 4.5%
See More Countries 44.9%

Source: Comtrade, Last Available Data

 
 

Main Products

- bn USD of products exported in 2013
Bed-linen, table linen, toilet linen and kitchen...Bed-linen, table linen, toilet linen and kitchen linen of all types of textile materials (excl. floor-cloths, polishing-cloths, dish-cloths and dusters) 11.4%
Cotton yarn other than sewing thread, containing >...Cotton yarn other than sewing thread, containing >= 85% cotton by weight (excl. that put up for retail sale) 8.8%
RiceRice 8.4%
Woven fabrics of cotton, containing >= 85% cotton...Woven fabrics of cotton, containing >= 85% cotton by weight and weighing > 200 g/m² 4.8%
Men's or boys' suits, ensembles, jackets, blazers,...Men's or boys' suits, ensembles, jackets, blazers, trousers, bib and brace overalls, breeches and shorts (excl. knitted or crocheted, wind-jackets and similar articles, separate waistcoats, track suits, ski suits and swimwear) 3.9%
See More Products 62.8%
- bn USD of products imported in 2013
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 21.1%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 12.5%
Palm oil and its fractions, whether or not refined...Palm oil and its fractions, whether or not refined (excl. chemically modified) 4.2%
Vessels and other floating structures for breaking...Vessels and other floating structures for breaking up 2.2%
Unused postage, revenue or similar stamps of...Unused postage, revenue or similar stamps of current or new issue in the country in which they have, or will have, a recognised face value; stamp-impressed paper; banknotes; cheque forms; stock, share or bond certificates and similar documents of title 1.9%
See More Products 58.1%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 
 
 

Main Services

Source: Comtrade, Last Available Data

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Sources of General Economic Information

Ministries
Government ministries and departments
Ministry of Commerce
Ministry of Finance
Ministry of Economic Affairs & Statistics
Statistical Office
Bureau of Statistics
Central Bank
State Bank of Pakistan
Stock Exchange
Islamabad Stock Exchange
Karachi Stock Exchange
Lahore Stock Exchange 
Search Engines
Google Pakistan
Yahoo Pakistan
Paki Search
Pakistan Services Limited
Pakistan Webs Directory
Pakistanism.com
Pak.org
OPD - Pakistan
Economic Portals

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Political Outline

Executive Power
President is the chief of state and is elected by the parliament for a five-year term. President is the commander-in-chief of the armed forces. Though President is supposed to have a largely ceremonial role but military Presidents have played an influential role in country's mainstream politics throughout Pakistan's history. Prime Minister is elected by the lower house of the parliament through a vote for a five-year term. Prime Minister is the head of the government and enjoys the executive powers which include implementation of the law and running the day-to-day affairs of the country. The council of ministers (cabinet) is appointed by the President on the advice of the Prime Minister.
Legislative Power
The legislature in Pakistan is bicameral. The parliament consists of: Senate (the upper house) having 100 seats, with its members indirectly elected by provincial assemblies to serve six-year terms; and National Assembly (the lower house) having 342 seats, with its members elected by popular vote to serve five-year terms. President can be impeached and removed from its office by two-third majority vote of the National Assembly, but the constitution of the country also gives the President the unique power to dissolve the National Assembly and also to dismiss the Prime Minister. Prime Minister cannot dissolve the parliament . The people of Pakistan still have limited political rights.
Main Political Parties
Pakistan has a multi-party system in which no one party often has a chance of gaining power alone, and parties work with each other to form coalition governments. Some of the major political parties in the country are:
- PML(Q) (Pakistan Muslim League-Quaid-e-Azam) - centrist conservative political party derived from the original Pakistan Muslim League which had laid foundation of the state of Pakistan;
- PPPP(Pakistan People's Party Parliamentarian) – a mainstream political party derived out of Pakistan People's Party, MMA (Muttahhida Majlis-e-Amal Pakistan) - a coalition of Islamic religious parties;
- PLM-N (Pakistan Muslim League - Nawaz group) – also derived from the original Pakistan Muslim League;
- MQM (Muhajir Qaumi Movement) - originally an ethnic student’s organization but now more known for its terrorist activities.

Note: Name and alliances of political parties in Pakistan keep on changing frequently.

Current Political Leaders
Chief of state: President Mamnoon HUSSAIN (since 9 September 2013) - Pakistan Muslim League
Head of government: Prime Minister Mohammad Nawaz SHARIF (since 5 June 2013) - Pakistan Muslim League
Next Election Dates
Senate: 2015
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
158/180
Evolution:
1 place up compared to 2013

Source: Worldwide Press Freedom Index 2014, Reporters Without Borders

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Partly Free
Political Freedom:
4/7

Map of freedom 2014
Source: Freedom House

 

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Last Updates: October 2014