Pakistan

Review of Economic
Performance

Pakistan : Quick FACTS

ISLAMIC REPUBLIC OF PAKISTAN
Area: 796,095 sq km
Population: 165 mln
Capital City: Islamabad
Religion: 97% Muslim, 3% Christian and Hindu
Government: Federal Republic
Head of State: Mr. Asif Ali Zardari
Real GDP Growth rate FY08: 5.8%
Annual Per Capita Income: US $ 1085
Inflation: 12.0%%
Legal System: Common Law
Major Industries: Textiles, sugar, vegetable
oils, agricultural products, cement, fertilizers,
steel, chemicals, sporting goods, light
engineering
Major trade partners for exports: U.S.,
U.A.E, U.K, Germany, and Hong Kong
Major trade partners for imports: U.A.E,
Saudi Arabia, Kuwait, U.S, and Japan

PAKISTAN: PAST ECONOMIC

PERFORMANCE

Real GDP Growth

GDP growth of over 5% has
been witnessed 9 times
during the last 18 years
period (FY91 to FY08).Out of
this, the most consistent
pattern of high GDP growth
was experienced during the
Musharraf era.
Other instances of high GDP
growth were seen during the
90s, under the government of
Nawaz Sharif (FY91 & FY92)
and Benazir Bhutto (FY95 and
FY96).
A slowdown in economic
activity was experienced
during the period FY97 to
FY02 due to the deteriorating
economic condition of the
country during this period.

Sectoral Share in GDP

Our economy is heavily
dependent on the service
sector, which has a share of
about 53% in the GDP of
Pakistan
Agriculture remains the
second important contributor
in GDP, with a share of 21%
(FY08).
The share of manufacturing
sector, the third largest
contributor, has increased
from 15% to 19% during the
same period, which can
partly be attributed to the
rising consumerism during
this period which led to
increased production and
sales by manufacturing
sector (e.g. Automobile

Sectoral & GDP Growth

3.5
%

4.2
%

3.9
%

2.0
%

3.1
%

4.7
%

7.5
%

9.0
%

5.8
%

6.8
%

5.8%

Foreign Private Investment - (US Mln $)

Monetary Assets(M2) Growth

M2, which includes cash in
circulation and deposits, has
experienced high growth
FY02 onwards with a
average growth of 17.4%
during the period.
The high M2 growth has
resulted in excess demand
and is partly responsible for
the high inflationary
pressures currently being
experienced by our country
The high interest rates
prevalent in the economy
will however result in
controlling the M2 growth
going forward, which is
targeted to be curtailed to
10% in the FY09 as per the
agreement with IMF.

BREAK OF BUDGET DEFICIT FINANCING

FY99

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08
P

External
Financing

97

70

121

83

113

(6)

120

149

147

119

Bank

(74)

40

(33)

14

(56)

64

60

71

102

464

Non-Bank

156

97

92

85

120

61

57

100

11

28

97

71

(in Billions)

Privatization
Proceeds

Trade Balance
The trade balance of
Pakistan has grown by
more than 7 times
during the 10 year
period FY98 to FY08.
The imports of the
* country picked up pace
from FY05 onwards
The increased imports
during the last year are
largely to Petroleum
products, Edible Oil and
import of Wheat and
Fertilizer.
Source: State Bank Of Pakistan

Remittances - (us mln $)

4,23
7
1490

1060

984

1,08
7

2,38
9

3,87
2

4,16
9

4,60
0

5,49
4

6,45
1
2,96
6

Current Account Deficit

Source: State Bank of Pakistan, Economic

Survey 2007-08

External Debt - (US mln $)

* Source: SBP website

Inflation

Subsidies - (PKR mln)

Reserves - (US mln $)

Per Capita Income ($)

Exchange Rate
The devaluation of

Rupee, esp. in the later

half of the FY08, has
resulted in significant
increase in PKR to
other currency
exchange rates.
Among PKR/USD,
PKR/GBP and PKR/EUR
exchange rates, the
latter has experienced
steepest increase of
about 36%, whereas
PKR/USD and PKR/GBP
have increased by 13%
and 16% respectively.

SECTOR-WISE
PERFORMANCE

AUTO SECTOR

Fertilizer sector

Cement Sector

ENERGY SECTOR

* Source: Economic Survey 2007-08 and ADB website

BANKING SECTOR

Lending Rate

Spread

Deposit Rate