Pakistan's Economy

Pakistan's Economy

Presented by: Asad, Imran & Shakir.

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We Badly Lag in Social Indicators.

We Consume More and Save Less.

Crisis of Governance and Implementation Weaknesses.

Our Share in the World Trade is shrinking.

#2

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We Face Energy and Water Shortages.

We Import More and Export Less.

Challenges to

Pakistan's Economy

Current Situation of Pakistan's Economy

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Political Stability, Law and Order/Security.

Cost of Doing Business is High.

Uncertainty and Unpredictability due to Lack of Continuity.

Government spends more than it earns as Revenues.

Current Problems Being Faced

Domestic and foreign investments have snagged even more due to rising inflation

Agriculture sector is facing problem of high fertilizer prices ,electricity shortfall

State-owned enterprises have seen little improvement. Corruption, bureaucratic influences and mismanagement is declining positive development.

National debt has escalated to Rs. 14.8 trillion and continues to remain a persistent problem for the country

High costs have caused Pakistani manufactured products to lose competitiveness in the international market.

Foreign debt is highly affecting foreign reserves and due to which our currency is depreciating

• Pakistan’s economy is considered massive informal economy and a consumption oriented society.

• Karachi Stock Exchange, have been performing well and the Equity and Real Estate sectors are showing signs of improvement.

• Pakistan registered 3.7 % growth in year 2011-2012

• Though Pakistan is unlikely to meet the target of 4.3% in the current year yet World Bank, IMF and ADB estimates are 3.8%, 3.5% and 3.7% respectively.

Projects that can actually help Pakistan out of the economic crisis:

• IP pipeline
• Gawadar port

These projects have been deemed controversial Because of the precarious balance we need to maintain with the West and our homeland security dilemma.

Structure of Pakistan's Economy

• At the time of independence the economy of Pakistan was an agro based economy as most of its population was living in villages and agriculture was their only source of earning, then economy passed from many transitions

Agriculture

Livestock

Industry

Fisheries

CNG Industry

• As of 2010, Pakistan is one of the largest users of CNG (compressed natural gas) in the world.

• Presently, more than 3,500 CNG stations are operating in the country in 99 cities and towns.

• 1000 more would be set up in the next two years.

• It has provided employment to over 50,000 people in Pakistan

According to FAOSTAT and the Food and Agriculture Organization of The United Nations2013 ranking Pakistan is one of the world's largest producers of the following commodities: Apricot (3rd), Buffalo Milk (2nd), Chickpea (3rd) ,Cotton, lint (4th) ,Cotton, Seed (3rd) ,Dates (5th) ,Mango (6th) ,Onion, dry (4th), Oranges (11th), Rice, paddy (11th) ,Sugarcane (5th) ,Wheat (10th)

Agriculture accounts for about 23% of GDP and employs about 44% of the labor force.

Fishery plays an important role in the national economy. It provides employment to about 400,000 fishermen directly. In addition, another 500,000 people are employed in ancillary industries.

IT Industry

National herd consists of

• 24.2 million cattle,
• 26.3 million buffaloes,
• 24.9 million sheep,
• 56.7 million goats
• 0.8 million camels.
• 530 million birds produced annually.

11 per cent of Pakistan's GDP

• Pakistan ranks forty-first in the world and fifty-fifth worldwide in factory output.

• Pakistan's industrial sector accounts for about 24% of GDP.

• Cotton Textile accounts for 66% in GDP.
• Amost 40% of the employed labor force.

• Other major industries include cement, fertilizer, sugar, steel, tobacco, chemicals and many more.

• Pakistan’s IT industry has been rising steadily since the last three years.

• The total number of IT companies increased to 1306 and the total estimated size of IT industry is $2.8 billion.

• In 2007, Pakistan was for the first time featured in the Global Services Location Index and was rated as the 30th best location for offshoring.

Textile Industry

• The Textile Industry is dominated by Punjab.

• Textile exports in 1999 were $5.2 billion and rose to become $10.5 billion by 2007.

• In the period July 2007 – June 2008, textile exports were US$10.62 billion.

• Textile exports share in total export of Pakistan has declined from 67% in 1997 to 55% in 2008.

Service Sector

How to Improve Economic Condition

Imports

• Pakistan's service sector accounts for about 53.3% of GDP.

• Transport, storage, communications, finance, and insurance account for 24% of this sector.

• wholesale and retail trade about 30%

• Pakistan’s imports stood at $33 billion according to estimates of 2014 January.

• Pakistan's single largest import category is petroleum and petroleum products.

• Other imports include: industrial machinery, construction machinery, trucks, automobiles, computers, medicines, pharmaceutical products, food items, civilian aircraft, defense equipment, iron, electronics, and other consumer items.

Recommendation # 9

Finally, our connectivity with the global markets is still low

Change in National Psyche and Mindset

What is Economy...

Recommendation # 1

The planning commission is like a fuel pump

Introduction to Economy of Pakistan

Recommendation # 8

A system which tries to balance the available resources of a country (land, labor, capital and enterprise) against the wants and needs of consumers.

• The economy of Pakistan is the 27th largest in the world in terms of purchasing power parity (PPP).

• Pakistan is 44th largest in terms of nominal GDP.

Market Economy

In market economies the government's role is limited to providing legislation to protect businesses and consumers and making sure no single business or organization restricts competition

Recommendation # 2

• The main positive point about our economy is that most problems are due to Management issues and not owing to economic imbalances.

• How can we overcome these challenges and problems and improve our economy, some of the policy recommendations are

Improved security and law & order

Recommendation # 7

Building up of Human Capital

Export and Import Statistics

Population and Economic Statistics

As Pakistan has a population of over 183 million world's 6th largest country in terms of population. Population is growing at the rate of 1.80%.

Pakistan exports textiles (garments, be linen, cotton cloth, yarn), rice, leather goods, sports goods, chemicals, manufactures,carpets, steel, foodstuffs, fertilizer,Cement, sugar, animals, electrical equipment, and rugs to united states, china, Afghanistan and united Arab emirates and is member of trade organizations like ECO, SAFTA, ASEAN, WIPO and WTO.

Pakistan has a semi-industrial economy, comprising of textiles, chemicals, food processing, agriculture and other industries.

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 the medium term.

Pakistan import petroleum, petroleum products, machinery, plastics, transportation equipment, edible oils, paper and paperboard, iron and steel, tea from china Saudi Arabia, United Arab Emirates and Kuwait

• Pakistan a low-income country, it is also recorded as a "Low Development Country" on the Human Development Index 2007.

• Pakistan has a large informal economy, which the government is trying to document and assess. Approximately 56% of adults are literate, and life expectancy is about 64 years.

Planned Economy

In a planned economy the government makes all decisions for society. Producers only make what they are instructed to make

Mixed Economy

The mixed economy is a combination of both planned and market economies.

• In a mixed economy, the government contributes and controls some resources and the market controls the rest

Recommendation # 6

Recommendation # 3

Huge untapped natural resources

Use of

Technology

Recommendation # 5

Recommendation # 4

Young Labor

Force

Governance, Devolution and Decentralization