Economic Instability in

Pakistan

Presented By:
Junaid Naseem
Intelligence Officer
Outline of the Presentation
• What is Economy
• Economy Of Pakistan
• Economic History
• Economic Indicators of Pakistan
• Causes of Economic Crisis in Pakistan
• Challenges to Pakistan Economy
• Conclusion
 Economy

• An economy , or Economic system, is the way a nation makes economic

choices about how the nation will use its resources to produce and distribute
goods and services.
Currency
• Pakistani rupee (PKR) Rs.1 = 100 Paisas
• 1 USD = 134.44 PKR (As on 26 November 2018)

Fiscal year
1 July – 30 June

Trade organizations
• WTO, SAARC, ECO, OIC, SAFTA, AIIB, SCO, IMF, Commonwealth
& Nations, World Bank
• 25th largest in the world in terms of purchasing power parity
(PPP)
• 42nd largest in terms of nominal gross domestic product.
• 147th in term of nominal GDP per capita of $1,641 in 2018
GDP
• $313.3 Billion or 34396.5 Billion Rupees (Nominal,2018)
• $1.141 Trillion (PPP, 2018)

GDP Growth
• 5.8% (FY2018)
• GDP per capita $1,641 (nominal, 2018)

GDP by sector
• Agriculture: 18.86%,Industry: 20.91%, Services: 60.23%
(2018 est.)
Inflation (CPI)
•7.0% (October 2018)

Population below poverty line

•29.5%

Unemployment
•6.0%
Main industries
• Textiles and Apparel
• Food processing
• Pharmaceuticals
• Construction Materials
• Chemicals
• Cement
• Fertilizer
• Mining
• Machinery
Main industries
• Steel
• Engineering
• Software and Hardware
• Automobiles
• Motorcycle and Auto parts
• Electronics
• Paper products
• Defense products
• Shipbuilding
Exports
• $24.772 billion (FY 2018)

Export Goods
• Textiles ($13,343.8 million), Food ($4,793.4 million),
Petroleum ($574.5 million), other manufacture
($4,116.5 million), All others ($1,391.6 million)

Export Partners
• United States 15.6%, United Kingdom 7.1%, China
7.0%, Afghanistan 6%, United Arab Emirates 5.6% ,
Germany 5.5%, Bangladesh 2.9% (2018 est.)
Imports
• $55.846 billion (FY 2018)

Imports Goods
• Machinery ($8699.8 million), Transport ($3206.4 million)
Textile ($4048.9 million), Agriculture and other chemicals
($8308.5 million), Metal ($4787.9 million), Miscellaneous
($1254.3 million), All Other ($5380.4 million), Other Imports
($3303.6 million).

Imports Partners
• China 20.5%, United Arab Emirates 15.9%, Singapore 8.0%,
Saudi Arabia 5.5%, United States 3.7%, Japan 3.4%, India
3.3%(2018 est.)
Public debt
•67.0% of GDP (June 2018)

Revenues
•15.2% of GDP, Pkr 5228.0 Billion or $47.6 billion(FY
2018)

Expenses
•21.8% of GDP, Pkr 7488.4 Billion or $68.2 billion(FY
2018)
Foreign Reserves
•SBP : $7.678 Billion
•Scheduled Banks : $6.389 Billion
•Total : $14.068 Billion (as on 2
November 2018)
 Pakistan was a middle class and predominantly agricultural country when it
gained independence in 1947. Pakistan's average economic growth rate in the first five
decades (1947–1997) has been higher than the growth rate of the world economy during
the same period. Average annual real GDP growth rates 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 inflation rate in Pakistan averaged 7.99 percent from 1957 until 2015, reaching an all-
time high of 37.81 percent in December 1973 and a record low of -10.32 percent in
February 1959.
 Since independence the economic growth has meant an increase in average income of about
150 percent over 1950–96. But Pakistan, like many other developing countries, has not been
able to narrow the gap between itself and rich industrial nations which have grown faster on a
per head basis.

 Per capita GNP growth rate during 1985–95 was only 1.2 percent per annum, substantially
lower than India (3.2), Bangladesh (2.1), and Sri Lanka (2.6). Growth was slow during the 1950s
averaging 3.1 percent per annum but accelerated to 6.7 percent during the sixties and
remained generally close to 6 percent per annum till the early 1990s.
• Gross domestic product (GDP)
• Industrial sector
• Agricultural sector
• Commodity producing sector growth rate
• Service sector
• Per capita income
• Inflation
• Government revenues and expenditures
• Current account
• Government debt and liabilities
• Pakistan External Debt Servicing (Principal + Interest)
• Foreign exchange reserves
• Foreign direct investment
• PSE 100 index growth rate
• Foreign trade
• Workers' remittances
• Stock market
• Poverty alleviation expenditures
• Tourism
 Gross domestic product (GDP)
List FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

GDP At MP
(Billion Rupees) 13,199.7 14,867.0 18,276.4 20,046.5 22,385.7 25,168.8 27,443.0 29,075.6 31,962.6 34,396.5

US Dollars, Last 109.8480

Day Average 81.3896 85.4634 85.9894 94.627 99.1141 98.8088 101.7895 104.7619 104.8861
(Avg. Ann)
Exchange Rates (30 Jun) (30 Jun) (30 Jun) (30 Jun) (30 Jun) (30 Jun) (30 Jun) (30 Jun) (30 Jun)

Nominal GDP
(Billion US 313.1
162.2 174.0 212.5 211.8 225.9 254.7 269.6 277.5 304.7
Dollars)

GDP At BP
(Billion Rupees) 8,580.0 8,801.4 9,120.3 9,470.3 9,819.1 10,217.1 10,631.6 11,116.8 11,714.1 12,392.6

Real GDP
Growth Rate 4.06% 4.56% 5.37% 5.79%
0.36% 2.58% 3.62% 3.84% 3.68% 4.05%
 Industrial sector
List 2008– 2009– 2010– 2011– 2012– 2013– 2014– 2015– 2016– 2017-
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Industrial Sector Growth

Rate -5.21% 3.42% 4.51% 2.55% 0.75% 4.53% 5.18% 5.69% 5.43% 5.80%

Manufacturing Sector
Growth Rate -4.18% 1.37% 2.50% 2.08% 4.85% 5.65% 3.88% 3.69% 5.82% 6.24%

Large Scale Manufacturing

Growth Rate -6.04% 0.41% 1.66% 1.13% 4.46% 5.46% 3.28% 2.98% 5.62% 6.13%

Small Scale Manufacturing

Growth Rate 8.57% 8.47% 8.51% 8.35% 8.28% 8.29% 8.21% 8.19% 8.15% 8.18%
Agricultural sector
List 2008– 2009– 2010– 2011– 2012– 2013– 2014– 2015– 2016– 2017-
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Agriculture Sector Growth 3.50% 0.23% 1.96% 3.62% 2.68% 2.50% 2.13% 0.15% 2.07% 3.81%
Rate

Wheat Production (Million

Tons) 24.0 23.3 25.2 23.5 24.2 26.0 25.1 25.6 26.7 25.5

Rice Production (Million

Tons) 6.9 6.9 4.8 6.2 5.6 6.8 7.0 6.8 6.8 7.4

Sugarcane Production
(Million Tons) 50.0 49.4 55.3 58.4 63.8 67.5 62.8 65.5 73.4 82.1

Cotton Production
(Million Bales) 11.8 12.9 11.5 13.6 13.0 12.8 14.0 9.9 10.7 11.9
Commodity producing sector growth rate

List 2008– 2009– 2010– 2011– 2012– 2013– 2014– 2015– 2016– 2017-
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Commodity Producing
Sector Growth Rate -0.88% 1.76% 3.21% 3.09% 1.73% 3.49% 3.63% 2.92% 3.79% 4.84%
 Service sector growth rate

List 2008– 2009– 2010– 2011– 2012– 2013– 2014– 2015– 2016– 2017-
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

SERVICE SECTOR
GROWTH RATE 1.33% 3.21% 3.94% 4.40% 5.13% 4.46% 4.36% 5.72% 6.46% 6.43%
 Per capita income

2008– 2009– 2010– 2011– 2012– 2013– 2014– 2015– 2016– 2017-
List
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Per Capita Income

(Us Dollars) 1026.1 1072.4 1274.1 1320.5 1333.7 1388.8 1514.0 1530.8 1632.1 1640.5
 Government revenues and expenditures

FY
List FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017
2018

Government Total Revenues

(Billion Rupees) 1850.9 2077.8 2252.9 2566.5 2982.4 3637.3 3931.0 4447.0 4936.7 5228.0

Government Total
Expenditures (Billion Rupees) 2531.3 3007.2 3447.3 3936.2 4816.3 5026.0 5387.8 5796.3 6800.5 7488.4

Fiscal Deficit (Billion Rupees) 680.4 929.4 1194.4 1369.7 1833.9 1388.7 1456.7 1349.3 1863.8 2260.4
 Current Account

List FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

Credit 35,357 38,135 47,703 48,243 50,197 51,153 52,920 51,336 51,867 54,429

Debit 44,617 42,081 47,489 52,901 52,693 54,283 55,629 56,203 64,488 72,559

Net
-9,261 -3,946 214 -4,658 -2,496 -3,130 -2,709 -4,867 -12,621 -18,130

Amounts in Million US Dollars

 Pakistan External Debt Servicing

List FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

Principal (Million US $) 2837 3140 2458 3294 5046 5659 3499 3076 4439 3335

Interest (Million US $) 1159 1015 1074 1019 933 909 1172 1346 1624 2293

Total (Million US $) 3996 4155 3531 4312 5978 6567 4671 4422 6063 5628
 Foreign trade
FY FY FY FY FY
List 2009 2010 2011 2012 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

Exports Of Pakistan (Billion

Us Dollars) 19.121 19.673 25.354 24.718 24.802 25.078 24.089 21.972 22.003 24.772

Exports Growth Rate 2.9% 0.3% 1.1% -3.9% -8.8% 0.1% 12.6%
-6.4% 28.9% -2.6%

Imports Of Pakistan (Billion

Us Dollars) 31.747 31.132 35.796 40.371 40.157 41.668 41.357 41.255 48.683 55.846

Imports Growth Rate 3.8% -0.7% -0.2% 18.0% 14.7%

-10.3% -1.7% 15.0% 12.8% -0.5%

Trade Deficit (Billion Us

Dollars) 12.627 11.452 10.427 15.652 15.355 16.590 17.267 19.283 26.680 31.074

Note :
This is the merchandised trade data (export and import) as released by the SBP.This may differ from
the data compiled by Pakistan Bureau of Statistics.
 Causes of Economic Crisis in Pakistan
• Political Instability
• IMF and World Bank
• Energy crisis
• Terrorism
• Wealth Concentration
• Corruption
 Causes of Economic Crisis in Pakistan
• Lack of Good Governance
• Unemployment
• Poor Health Facilities
• Lack of Quality Education
• Tax Evasion
Challenges to Pakistan Economy

1. We Consume More and Save Less

2. We Import More and Export Less
3. Government Spends More than it Earns as Revenues
4. Our Share in the World Trade is Shrinking
5. We Badly Lag in Social Indicators
 Challenges to Pakistan Economy
6. We Face Energy and Water Shortages
7. Cost of Doing Business is High
8. Crisis of Governance and Implementation Weaknesses
9. Uncertainty and Unpredictability due to Lack of Continuity
10. Political In-Stability, Law and Order/Security
THANKS