HUMA FAWAD

HITEC , TAXILA
SEPTEMBER 2018 – JANUARY 2019

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 • Macroeconomics is the study of the economy
as a whole, same type of industries, households,
country, geographically, globally etc

• Macroeconomics studies such things as:

• Inflation
• Unemployment
• Economic growth

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• Economy:
The structure of economic life or economic activity
in a community, a region, a country or group of
countries of the world

• Gross Domestic Product:

The market value of all final goods and services
produced by the resources located in a country
regardless of who owns those resources

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 Money:
 Something accepted as a medium of exchange
Flow:
A variable that measures the amount of something
over an interval of time such as amount of money
you spend of food each week.
Stock:
A variable that measures the amount of something at a
particular point in time, such as the amount of food
in your refrigerator or the amount of money you
have with you right now.

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 1. Achieving strong economic growth over long

term
 2. Reducing the size of economic fluctuations in
short term.
 3. Maintaining low inflation
 4. Reducing unemployment rate
 5. Reducing the size of current account deficit

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 Sustained increase in the economy’s productive

capacity

 1. Growth in the Labor Force

 2. Growth in the capital stock
 3. Better technology
 4. Improvement in the efficiency of production

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 Depression:
 A severe reduction in an economy’s total production
accompanied by high unemployment lasting more
than a year
Recession
A period of decline in total output lasting at least six
months and marked by contractions in many sectors
of the economy
Expansion
A phase of economic activity during which there is
an increase in an economy’s total production
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 From 1965 – 1990 Growth per capita increased

at an average rate of 6.4 percent annually. GDP
per capita increased from $4000 to $31000.

 1. Import Substitution, 1959-65

 2. Export Orientation, 1966-73
 3. Industrial Restructuring, 1974-84
 4. Economic Diversification, 1985-97
 5. Knowledge- based Economy, 1998-2008
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 Growth recovered during 2003-2007 to an average of 7.0% p.a.

Source: Various Issues of Economic Survey 1-11

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ZAB = Zulfiqar Ali Bhutto. BB= Benazir Bhutto. Mush=
Gen (R) 1-13
Zia = Gen Zia Ul Haq. NS= Nawaz Shareef .
Source: Various Issues of Economic Survey 1-14
 The share of agriculture in GDP was 60% in 1947. Today, it
contributes 22% and 78% contribution comes from industry
and services
 Production of wheat was 4.0 million tons in 1947. Today we
are producing over 23-24 million tons - almost 6 times
more
 Production of cotton was approximately 1.0 million bales in
1947. Today we are producing close to 13.0 -14.0 million
bales
 Production of sugarcane was 10 million tons in 1947. Today
we are producing over 55-60 million tons

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­ Food & Fuel Crisis (Common Challenges faced by every
economy)
­ Intensification of War on Terror
­ Political Instability
­ Less than satisfactory security environment
­ Energy Crisis
­ Economy Remained out of Radar of the Government
­ Weak governance
­ public–private sector relations

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­ Economic growth slowed to an average of 3.0% per annum
over the last five years from an average of 7.0 per annum
during the previous five years
­ Investment is down to 50 years low at 12.5% of GDP from as
high as 22.5% of GDP only five years ago
­ Domestic Saving Rate at 5.8% of GDP is the lowest in the
country’s history from an average of 15% of GDP during the
previous five years

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­ Budget deficit averaged 7.0% of GDP, reaching as high as 8.8% in 2012-13
­ Public debt more than doubled in 5 years from Rs. 5 trillion in 2007 to Rs. 13
trillion in 2012
­ Over $20 billion external debt added in 5 years
­ Foreign Investment has simply collapsed – down from $8.5 billion in 2007 to
just $0.8 billion in 2012
­ Inflation persisted in double digits for more than 50 months in a row
­ Pak Rupee has lost 39% of its value
­ Poverty and Unemployment have increased
­ Foreign exchange reserves is at $10.0 billion, of which, $4.8 billion is the
SBP’s reserves and $5.2 billion is commercial banks reserves with SBP on
August 30, 2013
­ Power Sector has received Rs. 1500 billion in subsidy in the last five years

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 Pakistan Slipped down to 129 Position in
ranking amongst 144 countries.
 Nepal (102nd)

 Bhutan (103rd)

 Bangladesh(109th)

 India (71st )

 Turkey (45th )

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