Economic overview Pakistan, in 36 editions.

Pakistan is a poor Third World country faced with the usual problems of rapidly increasing population, sizable government deficits, and heavy dependence on foreign aid. In addition, the economy must support a large military establishment and provide for the needs of 4 million Afghan refugees. A real economic growth rate averaging 5-6% in recent years has enabled the country to cope with these problems. Almost all agriculture and small-scale industry is in private hands, and the government seeks to privatize a portion of the large-scale industrial enterprises now publicly owned. In December 1988, Pakistan signed a three-year economic reform agreement with the IMF, which provides for a reduction in the government deficit and a liberalization of trade in return for further IMF financial support. The so-called Islamization of Late in 1990, the economy has affected mainly IMF suspended assistance to Pakistan because the financial sector; for example, a prohibition government failed to follow through on certain types of interest payments. deficit reforms. Pakistan almost certainly will make little headway against on raising living standards for its population problem; rapidly expanding population; at the current rate of growth, population would double in 32 29 years.

Pakistan is a poor Third World country faced with the usual problems of
rapidly increasing population, sizable government deficits, and heavy
dependence on foreign aid. In addition, the economy must support a large
military establishment and provide for the needs of 4 million Afghan
refugees. A real economic growth rate averaging 5-6% in recent years has
enabled the country to cope with these problems. Almost all agriculture and
small-scale industry is in private hands, and the government seeks to privatize a portion of the large-scale industrial enterprises now publicly owned. hands. In December 1988, 1990, Pakistan signed embarked on a three-year
sweeping economic reform agreement with the IMF, which provides for a reduction in the government deficit and a liberalization of trade in return for further IMF financial support. Late in 1990, the IMF suspended assistance program to Pakistan because the boost foreign and domestic
private investment and lower foreign aid dependence. The SHARIF government failed to follow through on deficit reforms.
has denationalized several state-owned firms and has attracted some foreign
investment. Pakistan almost certainly likely will make little headway on have difficulty raising living standards for
because of its rapidly expanding population; at population. At the current rate of growth,
population would double in 29 25 years.

Pakistan is a poor Third World country faced with the usual problems of
rapidly increasing population, sizable government deficits, and heavy
dependence on foreign aid. In addition, the economy must support a large
military establishment and provide for the needs of 4 million Afghan
refugees. establishment. A real economic growth rate averaging 5-6% in recent
years has
enabled helped the country to cope with these problems. Almost all
agriculture and
small-scale industry is in private hands. In 1990, Pakistan
embarked on a
sweeping economic liberalization program to boost foreign and domestic
domestic private investment and lower foreign aid dependence. The SHARIF government
has government denationalized several state-owned firms and has attracted some foreign
foreign investment. Pakistan likely will have difficulty raising living standards
standards because of its rapidly expanding population. At the current rate
of growth,
population would double in 25 years.

Pakistan is a poor Third World country faced with the usual problems of
of rapidly increasing population, sizable government deficits, and heavy
heavy dependence on foreign aid. In addition, the economy must support
a large
military establishment. A real Rapid economic growth rate growth, averaging 5-6% in recent 5%-6%
years over the past decade has helped the country to Pakistan cope with these problems.
However, growth slumped to 3% in FY93 because of severe flooding,
which damaged the key export crop, cotton. Almost all
agriculture and
small-scale industry is in private hands. In 1990, Pakistan
embarked
on a sweeping economic liberalization program to boost foreign and
domestic private investment and lower foreign aid dependence. The SHARIF
SHARIF government denationalized several state-owned firms and
attracted some
foreign investment. Pakistan likely will have
difficulty raising living
standards because of its rapidly expanding
population. At the current rate
of growth, population would double in
25 years.

Pakistan is a poor, heavily populated country, suffering from internal political disputes, lack of foreign investment, and a costly confrontation with neighboring India. Pakistan's economic outlook continues to be marred by its weak foreign exchange position, notably its continued reliance which relies on international creditors for hard currency inflows. The MUSHARRAF government faces $32 will face an estimated $21 billion in external foreign debt and has coming due in 2000-03, despite having rescheduled nearly completed rescheduling $2 billion in debt with Paris Club members and other bilateral creditors. members. Foreign loans and grants provide approximately 25% of government revenue, but debt service obligations total nearly 50% of government expenditure. The Although Pakistan successfully negotiated a $600 million IMF has remained silent on Stand-By Arrangement, future disbursements from its $1.56 billion bailout package initiated in 1999, loan installments will be jeopardized if Pakistan misses critical IMF benchmarks on revenue collection and other international financial institutions are gauging the current administration's resolve to implement necessary fiscal reforms. MUSHARRAF's ambitious economic agenda includes measures deficit. MUSHARRAF has complied largely with IMF recommendations to raise petroleum prices, widen the tax net, privatize public sector assets, and improve its the balance of trade position. Pakistan has made privatization a cornerstone of trade. However, Pakistan's economic revival, but may have difficulty attracting new investors until it receives positive endorsement from the World Bank. The Bank prospects remain uncertain; too little has withheld its approval pending resolution of changed despite the pricing dispute between new administration's intentions. Foreign exchange reserves hover at roughly $1 billion, GDP growth hinges on crop performance, the government import bill has been hammered by high oil prices, and independent power producers. both foreign and domestic investors remain wary of committing to projects in Pakistan.

Pakistan, an impoverished and underdeveloped country, suffers from internal political disputes, lack low levels of foreign investment, and a costly costly, ongoing confrontation with neighboring India. Pakistan's economic prospects, although still marred by poor human development indicators, low levels continued to improve in 2002 following unprecedented inflows of foreign investment, and reliance on international creditors for hard currency inflows, were nonetheless on an upswing through most of assistance beginning in 2001. Foreign exchange reserves have grown to record levels, supported largely by fast growth in recorded worker remittances. Trade levels rebounded after a sharp decline in late 2001. The MUSHARRAF government has made significant inroads in macroeconomic reform - since 2000, but progress is beginning to slow. Although it completed an IMF short-term loan program for the first time and improved its standing with international creditors by increasing revenue collection and restraining the fiscal deficit is in the 2001/02 budget. While Pakistan has capitalized on second year of its international standing after the 11 September terrorist attacks on the US by garnering substantial assistance from abroad - including $1.3 billion in IMF Poverty Reduction and Growth Facility aid and $12.5 billion in Paris Club debt rescheduling - long-term Facility, Islamabad continues to require waivers for politically difficult reforms. Long-term prospects remain uncertain. uncertain as development spending remains low, regional tensions remain high, and political tensions weaken Pakistan's commitment to lender-recommended economic reforms. GDP growth will continue to hinge on crop performance; dependence on foreign oil leaves the import bill vulnerable to fluctuating oil prices; and foreign and domestic investors remain wary of committing to projects in Pakistan. Pakistani trade levels - already in decline due efforts to the global economic downturn - worsened in the aftermath of open and modernize the September 11 attacks. economy remain uneven.

Pakistan, an impoverished and underdeveloped country, has suffered from decades of internal political disputes, low levels of foreign investment, and a costly, ongoing confrontation with neighboring India. However, IMF-approved government policies, bolstered by generous foreign assistance and renewed access to global markets since late 2001, have generated solid macroeconomic recovery the last two three years. The government has made substantial inroads in macroeconomic reform reforms since 2000, although progress on more politically sensitive reforms has slowed. For example, in the third and final year of its $1.3 billion IMF Poverty Reduction and Growth Facility, Islamabad has continued to require waivers for energy sector reforms. While long-term prospects remain uncertain, given Pakistan's low level of development, medium-term prospects for job creation and poverty reduction are the best in nearly a decade. Islamabad has raised development spending from about 2% of GDP in the 1990s to 4% in 2003, a necessary step towards reversing the broad underdevelopment of its social sector. GDP growth is heavily growth, spurred by double-digit gains in industrial production over the past year, has become less dependent on rain-fed crops, and last year's end to a four-year drought should support moderate agricultural growth for the next few years. agriculture. Foreign exchange reserves continued to reach new levels in 2003, 2004, supported by robust export growth and steady worker remittances.

Pakistan, an impoverished and underdeveloped country, has suffered from decades of internal political disputes, low levels of foreign investment, and a costly, ongoing confrontation with neighboring India. However, IMF-approved government policies, bolstered by generous foreign assistance and renewed access to global markets since 2001, have generated solid macroeconomic recovery the last three four years. The government has made substantial macroeconomic reforms since 2000, although progress on more politically sensitive reforms has slowed. For example, in the third and final budget for fiscal year of its $1.3 billion IMF Poverty Reduction and Growth Facility, 2006, Islamabad has continued to require waivers for energy sector reforms. did not impose taxes on the agriculture or real estate sectors, despite Pakistan's chronically low tax-to-GDP ratio. While long-term prospects remain uncertain, given Pakistan's low level of development, medium-term prospects for job creation and poverty reduction are the best in nearly more than a decade. Islamabad has raised development spending from about 2% of GDP in the 1990s to 4% in 2003, a necessary step towards reversing the broad underdevelopment of its social sector. GDP growth, spurred by double-digit gains in industrial production over the past year, has become less dependent on agriculture. agriculture, and remained above 7% in 2004 and 2005. Inflation remains the biggest threat to the economy, jumping to more than 9% in 2005. The World Bank and Asian Development Bank announced that they would provide US $1 billion each in aid to help Pakistan rebuild areas hit by the October 2005 earthquake in Kashmir. Foreign exchange reserves continued to reach new levels in 2004, 2005, supported by robust export growth and steady worker remittances. In the near term, growth probably cannot be sustained at the 7% level; however, massive international aid, increased government spending, lower taxes, and pay increases for government workers will help Pakistan maintain strong GDP growth over the longer term.

Pakistan, an impoverished and underdeveloped country, has suffered from decades of internal political disputes, low levels of foreign investment, and a costly, ongoing confrontation with neighboring India. However, IMF-approved government policies, bolstered by generous foreign assistance and renewed access to global markets since 2001, have generated solid macroeconomic recovery the last four five years. The government has made substantial macroeconomic reforms since 2000, although progress on more politically sensitive reforms has slowed. For example, in the budget for fiscal year 2006, Islamabad did not impose taxes on most notably privatizing the agriculture or real estate sectors, despite Pakistan's chronically low tax-to-GDP ratio. While long-term prospects remain uncertain, given Pakistan's low level of development, medium-term prospects for job creation banking sector. Poverty levels have decreased by 10% since 2001, and poverty reduction are the best in more than a decade. Islamabad has steadily raised development spending from about 2% of GDP in recent years, including a 52% real increase in the 1990s to 4% budget allocation for development in 2003, FY07, a necessary step towards toward reversing the broad underdevelopment of its social sector. The fiscal deficit - the result of chronically low tax collection and increased spending, including reconstruction costs from the October 2005 earthquake - appears manageable for now. GDP growth, spurred by double-digit gains in industrial production over the past year, has become less dependent on agriculture, industrial and service sectors, remained above 7% in 2004 and 2005. the 6-8% range in 2004-06. Inflation remains the biggest threat to the economy, jumping to more than 9% in 2005. 2005 before easing to 7.9% in 2006. The World Bank and Asian Development Bank announced that they would provide US $1 billion each central bank is pursuing tighter monetary policy - raising interest rates in aid 2006 - while trying to help Pakistan rebuild areas hit by the October 2005 earthquake in Kashmir. preserve growth. Foreign exchange reserves continued to reach new levels in 2005, supported are bolstered by steady worker remittances. In the near term, remittances, but a growing current account deficit - driven by a widening trade gap as import growth probably cannot be sustained at the 7% level; however, massive international aid, increased government spending, lower taxes, outstrips export expansion - could draw down reserves and pay increases for government workers will help Pakistan maintain strong dampen GDP growth over in the longer medium term.

Pakistan, an impoverished and underdeveloped country, has suffered from decades of internal political disputes, low levels of foreign investment, and a costly, ongoing confrontation with neighboring India. However, since 2001, IMF-approved government policies, reforms - most notably, privatization of the banking sector - bolstered by generous foreign assistance and renewed access to global markets since 2001, markets, have generated solid macroeconomic recovery the last five years. The government recovery. Pakistan has made substantial macroeconomic reforms since 2000, most notably privatizing experienced GDP growth in the banking sector. 6-8% range in 2004-07, spurred by gains in the industrial and service sectors. Poverty levels have decreased by 10% since 2001, and Islamabad has steadily raised development spending in recent years, including a 52% real increase in the budget allocation for development in FY07, a necessary step toward reversing FY07. In 2007 the broad underdevelopment of its social sector. The fiscal deficit - the a result of chronically low tax collection and increased spending, including reconstruction costs from the October 2005 earthquake spending - appears manageable for now. GDP growth, spurred by gains in the industrial and service sectors, remained in the 6-8% range in 2004-06. exceeded Islamabad's target of 4% of GDP. Inflation remains the biggest threat to top concern among the economy, public, jumping from 7.7% in 2007 to more than 9% in 2005 before easing to 7.9% in 2006. 11% during the first few months of 2008, primarily because of rising world commodity prices. The central bank is pursuing tighter monetary policy - raising interest rates in 2006 - while trying to preserve growth. Foreign exchange reserves are bolstered by steady worker remittances, but a growing current account deficit - driven by a widening trade gap as import growth outstrips export expansion - could draw down reserves and dampen GDP growth in Pakistani rupee has depreciated since the medium term. proclamation of emergency rule in November 2007.

Pakistan, an impoverished and underdeveloped country, has suffered from decades of internal political disputes, low levels of foreign investment, and a costly, ongoing confrontation with neighboring India. However, since 2001, IMF-approved reforms - most notably, privatization declining exports of the banking sector - bolstered by generous foreign assistance manufactures. Faced with untenable budgetary deficits, high inflation, and renewed access hemorrhaging foreign exchange reserves, the government agreed to global markets, have generated macroeconomic recovery. Pakistan has experienced an International Monetary Fund Standby Arrangement in November 2008. Between 2004-07, GDP growth in the 6-8% range in 2004-07, was spurred by gains in the industrial and service sectors. sectors, despite severe electricity shortfalls. Poverty levels have decreased by 10% since 2001, and Islamabad has steadily raised development spending in recent years, including a 52% real increase in the budget allocation for development in FY07. years. In 2007 2008 the fiscal deficit - a result of chronically low tax collection and increased spending - exceeded Islamabad's target of 4% of GDP. Inflation remains the top concern among the public, jumping from 7.7% in 2007 to more than 11% during the first few months of 20.8% in 2008, primarily because of rising world fuel and commodity prices. The In addition, the Pakistani rupee has depreciated since the proclamation significantly as a result of emergency rule in November 2007. political and economic instability.

Pakistan, an impoverished and underdeveloped country, has suffered from decades of internal political disputes and low levels of foreign investment. Between 2001-07, however, poverty levels decreased by 10%, as Islamabad steadily raised development spending. Between During 2004-07, GDP growth in the 5-8% range was spurred by gains in the industrial and service sectors - despite severe electricity shortfalls - but growth slowed in 2008-09 and unemployment rose. Inflation remains the top concern among the public, climbing from 7.7% in 2007 to more than 13% in 2010. In addition, the Pakistani rupee has depreciated since 2007 as a result of political and economic instability. The government agreed to an International Monetary Fund Standby Arrangement in November 2008 in response to a balance of payments crisis, but during 2009-10 its current account strengthened and foreign exchange reserves stabilized - largely because of lower oil prices and record remittances from workers abroad. Record floods in July-August 2010 lowered agricultural output and contributed to a jump in inflation, and reconstruction costs will strain the limited resources of the government. Textiles account for most of Pakistan's export earnings, but Pakistan's failure to expand a viable export base for other manufactures has left the country vulnerable to shifts in world demand. Other long term challenges include expanding investment in education, healthcare, and electricity production, and reducing dependence on foreign donors.

Decades of internal political disputes and low levels of foreign investment have led to slow growth and underdevelopment in Pakistan. Agriculture accounts for more than one-fifth of output and two-fifths of employment. Textiles account for most of Pakistan's export earnings, and Pakistan's failure to expand a viable export base for other manufactures has left the country vulnerable to shifts in world demand. Official unemployment is under 6%, but this fails to capture the true picture, because much of the economy is informal and underemployment remains high. Over the past few years, low growth and high inflation, led by a spurt in food prices, have increased the amount of poverty - the UN Human Development Report estimated poverty in 2011 at almost 50% of the population. Inflation has worsened the situation, climbing from 7.7% in 2007 to almost 12% for 2011, before declining to 10% in 2012. As a result of political and economic instability, the Pakistani rupee has depreciated more than 40% since 2007. The government agreed to an International Monetary Fund Standby Arrangement in November 2008 in response to a balance of payments crisis. Although the economy has stabilized since the crisis, it has failed to recover. Foreign investment has not returned, due to investor concerns related to governance, energy, security, and a slow-down in the global economy. Remittances from overseas workers, averaging about $1 billion a month since March 2011, remain a bright spot for Pakistan. However, after a small current account surplus in fiscal year 2011 (July 2010/June 2011), Pakistan's current account turned to deficit in fiscal year 2012, spurred by higher prices for imported oil and lower prices for exported cotton. Pakistan remains stuck in a low-income, low-growth trap, with growth averaging about 3% per year from 2008 to 2012. Pakistan must address long standing issues related to government revenues and energy production in order to spur the amount of economic growth that will be necessary to employ its growing population. and rapidly urbanizing population, more than half of which is under 22. Other long term challenges include expanding investment in education and healthcare, adapting to the effects of climate change and natural disasters, and reducing dependence on foreign donors.

Decades of internal political disputes and low levels of foreign investment have led to slow growth and underdevelopment in Pakistan. Agriculture accounts for more than one-fifth of output and two-fifths of employment. Textiles account for most of Pakistan's export earnings, and Pakistan's failure to expand a viable export base for other manufactures has left the country vulnerable to shifts in world demand. Official unemployment is under 6%, was 6.6% in 2013, but this fails to capture the true picture, because much of the economy is informal and underemployment remains high. Over the past few years, low growth and high inflation, led by a spurt in food prices, have increased the amount of poverty - the UN Human Development Report estimated poverty in 2011 at almost 50% of the population. Inflation has worsened the situation, climbing from 7.7% in 2007 to almost 12% for 2011, before declining to 10% in 2012. poverty. As a result of political and economic instability, the Pakistani rupee has depreciated more than 40% since 2007. The government agreed to an International Monetary Fund Standby Arrangement in November 2008 in response to a balance of payments crisis. Although the economy has stabilized since the crisis, it has failed to recover. Foreign investment has not returned, due to investor concerns related to governance, energy, security, and a slow-down in the global economy. Remittances from overseas workers, averaging about $1 billion a month since March 2011, remain a bright spot for Pakistan. However, after a small current account surplus in fiscal year 2011 (July 2010/June 2011), Pakistan's current account turned to deficit in fiscal year 2012, the following two years, spurred by higher prices for imported oil and lower prices for exported cotton. Pakistan remains stuck in a low-income, low-growth trap, with growth averaging about 3% 3.5% per year from 2008 to 2012. 2013. Pakistan must address long standing issues related to government revenues and energy production in order to spur the amount of economic growth that will be necessary to employ its growing and rapidly urbanizing population, more than half of which is under 22. Other long term challenges include expanding investment in education and healthcare, adapting to the effects of climate change and natural disasters, and reducing dependence on foreign donors.

Decades of internal political disputes and low levels of foreign investment have led to slow growth and underdevelopment in Pakistan. Agriculture accounts for more than one-fifth one-fourth of output and two-fifths of employment. Textiles account for most of Pakistan's export earnings, and Pakistan's failure to expand a viable export base for other manufactures has diversify its exportshas left the country vulnerable to shifts in world demand. Official unemployment was 6.6% 6.9% in 2013, 2014, but this fails to capture the true picture, because much of the economy is informal and underemployment remains high. Over the past few years, low growth and high inflation, led by a spurt in food prices, have increased the amount Pakistan’s human development continues to lag behind most of poverty. the region.. As a result of political and economic macroeconomic instability, the Pakistani rupee has depreciated more than 40% since 2007. The government agreed to an International Monetary Fund Standby Arrangement in November 2008 in response to a preventa balance of payments crisis. Although crisis, but the IMF ended the Arrangement early because of Pakistan’s failure to implement required reforms. The economy has stabilized since the crisis, stabilized, it has failed continues to recover. Foreign underperform and foreign investment has not returned, returned to levels seen during themid-2000’s, due to investor concerns related to governance, energy, security, electricity shortages, , and a slow-down in the global economy. Remittances from overseas workers, averaging about $1 more than$1 billion a month since March 2011, month, remain a bright spot for Pakistan. However, after After a small current account surplus in fiscal year 2011 (July 2010/June 2011), Pakistan's current account turned to a deficit in the following two years, where it remained through 2014, spurred by higher prices for imported oil and lower prices for exported cotton. In September 2013, after facing balance of payments concerns, Pakistan entered into a three-year, $6.7 billion IMF Extended Fund Facility. The Sharif government has since made modest progress implementing fiscal and energy reforms, and in December 2014 the IMF described Pakistan’s progress as “broadly on track.” Pakistan remains stuck in a low-income, low-growth trap, with growth averaging about 3.5% per year from 2008 to 2013. 2014. Pakistan must address long standing issues related to government revenues and energy production in the electricity and natural gas sectorsin order to spur the amount of economic growth that will be necessary to employ its growing and rapidly urbanizing population, more than half of which is under 22. Other long term challenges include expanding investment in education and healthcare, adapting to the effects of climate change and natural disasters, and reducing dependence on foreign donors.

Decades of internal political disputes and low levels of foreign investment have led to slow growth and underdevelopment in Pakistan. Pakistan has a large English-speaking population. Nevertheless, a challenging security environment, electricity shortages, and a burdensome investment climate have deterred investors. Agriculture accounts for more than one-fourth of output and two-fifths of employment. Textiles and apparel account for most of Pakistan's export earnings, and Pakistan's failure to diversify its exportshas exports has left the country vulnerable to shifts in world demand. Pakistan’s GDP growth has gradually increased since 2012. Official unemployment was 6.9% 6.5% in 2014, 2015, but this fails to capture the true picture, because much of the economy is informal and underemployment remains high. Pakistan’s human Human development continues to lag behind most of the region.. As a result of political and macroeconomic instability, region.
In coordination with the Pakistani rupee has depreciated more than 40% since 2007. The government agreed to an International Monetary Fund Standby Arrangement (IMF), Pakistan embarked on an economic reform program in November 2008 to preventa balance of payments crisis, but the IMF ended 2013. While the Arrangement early because of Pakistan’s failure to implement required reforms. The economy reform process has stabilized, it continues to underperform been mixed, and foreign investment issues like privatization of state-owned enterprises remain unresolved, Pakistan has not returned to levels seen during themid-2000’s, due to investor concerns related to governance, electricity shortages, , restored macroeconomic stability, improved its credit rating, and a slow-down in boosted growth. The Pakistani rupee, after heavy depreciation, remained relatively stable against the global economy. US dollar in 2014-15. Remittances from overseas workers, averaging more than$1 than $1.5 billion a month, remain are a bright spot key revenue source for Pakistan. After Pakistan, partly compensating for a small current account surplus lack of foreign investment and a slowdown in fiscal year 2011 (July 2010/June 2011), Pakistan's current account turned portfolio investment. Falling global oil prices in 2015 contributed to a narrowing current account deficit where it remained through 2014, spurred by higher prices for imported oil and lower prices for exported cotton. In September 2013, after facing balance of payments concerns, Pakistan entered into inflation, despite weak export performance. Pakistan’s program with the IMF – a three-year, $6.7 billion IMF Extended Fund Facility. The Sharif government has since made modest progress implementing fiscal and Facility focusing on reducing energy reforms, shortages, stabilizing public finances, expanding revenue, and in December 2014 improving the IMF described Pakistan’s progress as “broadly external balance – is slated to conclude in September 2016. While passing most quantitative targets, Pakistan has missed targets on track.” structural reforms and performance criteria throughout the program.
Pakistan remains stuck in a low-income, low-growth trap, with growth averaging about 3.5% per year from 2008 to 2014. 2013. Pakistan must address long standing long-standing issues related to government revenues and revenues, with the electricity and natural gas sectorsin order tax base being narrow at 11% of GDP. Given demographic challenges, Pakistan’s leadership will be pressed to spur the amount implement economic reforms, promote further development of the energy sector, and attract foreign investment to support sufficient economic growth that will be necessary to employ its growing and rapidly urbanizing population, more than half much of which is under 22. the age of 25. Other long term long-term challenges include expanding investment in education and healthcare, adapting to the effects of climate change and natural disasters, improving the country’s business climate, and reducing dependence on foreign donors. Pakistan and China are implementing the “China-Pakistan Economic Corridor”, a $46 billion investment program targeted towards the energy sector and other infrastructure project that Islamabad and Beijing had agreed on in early 2014.

Decades of internal political disputes and low levels of foreign investment have led to slow growth and underdevelopment in Pakistan. Pakistan has a large English-speaking population. Nevertheless, a challenging security environment, electricity shortages, and a burdensome investment climate have deterred investors. Agriculture accounts for more than one-fourth one-fifth of output and two-fifths of employment. Textiles and apparel account for most of Pakistan's export earnings, and earnings; Pakistan's failure to diversify its exports has left the country vulnerable to shifts in world demand. Pakistan’s GDP growth has gradually increased since 2012. Official unemployment was 6.5% 6.1% in 2015, 2016, but this fails to capture the true picture, because much of the economy is informal and underemployment remains high. Human development continues to lag behind most of the region.
In coordination with the International Monetary Fund (IMF), 2013, Pakistan embarked on an economic reform program in 2013. While the reform process has been mixed, a $6.3 billion IMF Extended Fund Facility, which focused on reducing energy shortages, stabilizing public finances, increasing revenue collection, and issues like privatization improving its balance of state-owned enterprises remain unresolved, payments position. The program concluded in September 2016. Although Pakistan has missed several structural reform criteria, it restored macroeconomic stability, improved its credit rating, and boosted growth. The Pakistani rupee, after heavy depreciation, depreciation in 2013, remained relatively stable against the US dollar in 2014-15. Remittances from overseas workers, averaging more than $1.5 billion a month, are a key revenue source for Pakistan, partly compensating for a lack of foreign investment and a slowdown in portfolio investment. Falling 2016. Low global oil prices in 2015 2016 contributed to a narrowing current account deficit and lower inflation, despite weak export performance. Pakistan’s program with the IMF – inflation. Remittances from overseas workers continued to be a three-year, $6.7 billion Extended Fund Facility focusing on reducing energy shortages, stabilizing public finances, expanding revenue, and improving key revenue source, also mitigating the external balance – is slated to conclude in September 2016. While passing most quantitative targets, Pakistan has missed targets on structural reforms impact of the lack of foreign investment and performance criteria throughout a growing trade deficit on the program. country’s current account.
Pakistan remains stuck in a low-income, low-growth trap, with growth averaging about 3.5% per year from 2008 to 2013. Pakistan must continue to address long-standing issues related several longstanding issues, including expanding investment in education and healthcare, adapting to government revenues, with the tax base being narrow at 11% effects of GDP. climate change and natural disasters, improving the country’s business environment, reducing dependence on foreign donors, and widening the country’s tax base. Given demographic challenges, Pakistan’s leadership will be pressed to implement economic reforms, promote further development of the energy sector, and attract foreign investment to support sufficient economic growth necessary to employ its growing and rapidly urbanizing population, much of which is under the age of 25. Other long-term challenges include expanding investment in education and healthcare, adapting
In an effort to the effects of climate change and natural disasters, improving the country’s business climate, and reducing dependence on foreign donors. boost development, Pakistan and China are implementing the “China-Pakistan Economic Corridor”, Corridor,” a $46 billion investment program targeted towards the energy sector and other infrastructure project projects that Islamabad and Beijing had agreed on in early 2014. 2013.

Decades of internal political disputes and low levels of foreign investment have led to slow growth and underdevelopment in Pakistan. Pakistan has a large English-speaking population. Nevertheless, population, with English-language skills less prevalent outside urban centers. Despite some progress in recent years in both security and energy, a challenging security environment, electricity shortages, and a burdensome investment climate have traditionally deterred investors. Agriculture accounts for one-fifth of output and two-fifths of employment. Textiles and apparel account for most more than half of Pakistan's export earnings; Pakistan's failure to diversify its exports has left the country vulnerable to shifts in world demand. Pakistan’s GDP growth has gradually increased since 2012. 2012, and was 5.3% in 2017. Official unemployment was 6.1% 6% in 2016, 2017, but this fails to capture the true picture, because much of the economy is informal and underemployment remains high. Human development continues to lag behind most of the region.
In 2013, Pakistan embarked on a $6.3 billion IMF Extended Fund Facility, which focused on reducing energy shortages, stabilizing public finances, increasing revenue collection, and improving its balance of payments position. The program concluded in September 2016. Although Pakistan missed several structural reform criteria, it restored macroeconomic stability, improved its credit rating, and boosted growth. The Pakistani rupee, after heavy depreciation in 2013, rupee has remained relatively stable against the US dollar in 2016. Low global oil prices in 2016 contributed to a narrowing current account deficit since 2015, though it declined about 10% between November 2017 and lower inflation. Remittances from overseas workers continued to be a key revenue source, also mitigating the impact March 2018. Balance of the lack payments concerns have reemerged, however, as a result of foreign investment and a growing trade deficit on the country’s current account.
significant increase in imports and weak export and remittance growth. Pakistan must continue to address several longstanding issues, including expanding investment in education and education, healthcare, and sanitation; adapting to the effects of climate change and natural disasters, disasters; improving the country’s business environment, reducing dependence on foreign donors, environment; and widening the country’s tax base. Given demographic challenges, Pakistan’s leadership will be pressed to implement economic reforms, promote further development of the energy sector, and attract foreign investment to support sufficient economic growth necessary to employ its growing and rapidly urbanizing population, much of which is under the age of 25.
In an effort to boost development, Pakistan and China are implementing the “China-Pakistan "China-Pakistan Economic Corridor,” a $46 Corridor" (CPEC) with $60 billion investment program in investments targeted towards the energy sector and other infrastructure projects that Islamabad projects. Pakistan believes CPEC investments will enable growth rates of over 6% of GDP by laying the groundwork for increased exports. CPEC-related obligations, however, have raised IMF concern about Pakistan’s capital outflows and Beijing had agreed on in early 2013. external financing needs over the medium term.

Decades of internal political disputes and low levels of foreign investment have led to underdevelopment in Pakistan. Pakistan has a large English-speaking population, with English-language skills less prevalent outside urban centers. Despite some progress in recent years in both security and energy, a challenging security environment, electricity shortages, and a burdensome investment climate have traditionally deterred investors. Agriculture accounts for one-fifth of output and two-fifths of employment. Textiles and apparel account for more than half of Pakistan's export earnings; Pakistan's failure to diversify its exports has left the country vulnerable to shifts in world demand. Pakistan’s GDP growth has gradually increased since 2012, and was 5.3% in 2017. Official unemployment was 6% in 2017, but this fails to capture the true picture, because much of the economy is informal and underemployment remains high. Human development continues to lag behind most of the region.
In 2013, Pakistan embarked on a $6.3 billion IMF Extended Fund Facility, which focused on reducing energy shortages, stabilizing public finances, increasing revenue collection, and improving its balance of payments position. The program concluded in September 2016. Although Pakistan missed several structural reform criteria, it restored macroeconomic stability, improved its credit rating, and boosted growth. The Pakistani rupee has remained relatively stable against the US dollar since 2015, though it declined about 10% between November 2017 and March 2018. Balance of payments concerns have reemerged, however, as a result of a significant increase in imports and weak export and remittance growth.
Pakistan must continue to address several longstanding issues, including expanding investment in education, healthcare, and sanitation; adapting to the effects of climate change and natural disasters; improving the country’s business environment; and widening the country’s tax base. Given demographic challenges, Pakistan’s leadership will be pressed to implement economic reforms, promote further development of the energy sector, and attract foreign investment to support sufficient economic growth necessary to employ its growing and rapidly urbanizing population, much of which is under the age of 25.
In an effort to boost development, Pakistan and China are implementing the "China-Pakistan Economic Corridor" (CPEC) with $60 billion in investments targeted towards energy and other infrastructure projects. Pakistan believes CPEC investments will enable growth rates of over 6% of GDP by laying the groundwork for increased exports. CPEC-related obligations, however, have raised IMF concern about Pakistan’s capital outflows and external financing needs over the medium term.

lower middle-income South Asian economy; extremely high debt; endemic corruption; major currency devaluation; major food insecurity and inflation; environmentally fragile agricultural sector; regional disputes with India and Afghanistan hinder investment investment; falling inflation, IMF relief programs, and strong agricultural output slowly contributing to economic recovery