Economy of Pakistan

Economy of Pakistan

Karachi the financial hub of Pakistan
Currency	Pakistani rupee (₨) (PKR)
Fiscal year	1 July – 30 June
Trade organisations	ECO, SAFTA, WTO, AIIB, ADB, and others
Country group	Developing economy (lower-middle income)
Statistics
Population	227 million (5th; 2021 estimate)
GDP	$383 Billion (nominal; 2022 est.). $1.468 Trillion (PPP; 2022 est.)
GDP rank	44th (nominal; 2021) 24th (PPP; 2022)
GDP growth	6.1% (17/18) 3.1% (18/19) −1.0% (19/20F) 5.6% (20/21R)
GDP per capita	$1,798 (Nominal; 2022 est.) $6,469(PPP; 2022 est.)
GDP per capita rank	172th (nominal; Jun 2021) 156th (PPP; Jun 2021)
GDP by sector	Agriculture: 23.08% Industry: 18.91% Services: 58.01% (2021)
Inflation (CPI)	13.0% YoY (Jan 2022)
Base borrowing rate	12.25% (Apr 2022)
Population below poverty line	35.7% on less than $3.20/day (2018) 0.5% in extreme poverty (December 2020) (World Poverty Clock estimate)
Gini coefficient	31.6 medium (2018, World Bank)
Human Development Index	0.557 medium (2019) (154nd) 0.384 low IHDI (2019)
Labour force	Labour Force 71.76 million Employed 67.25 million Unemployed 4.51 million (2021)
Labour force by occupation	Agriculture: 37.4% Industry: 25.4% Services: 37.2% (2020–21)
Unemployment	6.3% (2020-21) 6.9% (2018–19)
Main industries	Textiles Apparel Food processing Pharmaceuticals Surgical instruments Construction materials Fertilizer Shrimp Paper products
External
Exports	$25.630 billion (FY 2021)
Export goods	Textiles: $14,409 million Food: $4,503 million Chemical and pharmaceutical products: $1,146 million Leather manufacturers: $559 million Sports goods: $470 million Petroleum: $235 million
Main export partners	United States 19.6% China 8.0% United Kingdom 8.0% Germany 5.9% United Arab Emirates 5.8% Netherlands 4.4% Afghanistan 3.8% (2021 est.)
Imports	$53.785 billion (FY 2021)
Import goods	Petroleum: 9,747 million Agriculture and other chemicals: $8,409 million Machinery: $8,322 million Food: $7,244 million Textile: $4,756 million Metal: $4,583 million Transport: $2,745 million Plastic material: 2,459 million
Main import partners	China 24.7% United Arab Emirates 12.9% Singapore 5.8% United States 4.5% Saudi Arabia 4.4% Japan 2.8% Indonesia 2.4% (2021 est.)
FDI stock	$34.798 billion (FY 2019)
Current account	-12.099 billion US$ (FY 2022 Jul-Feb)
Gross external debt	$127.02 billion (September 2021)
Public finances
Government debt	64.3% of GDP (Jun 2021)
Budget balance	−6.1% of GDP (FY 2021)
Revenues	12.4% of GDP; 6,903 billion PKR or $43 billion (FY 2021)
Expenses	18.6% of GDP; 10,307 billion PKR $64 billion (FY 2021)
Credit rating	Standard & Poor's: B− (Domestic) B− (Foreign) B− (T&C Assessment) Outlook: Stable Moody's: B3 Outlook: Stable Fitch: B− Outlook: Stable
Foreign reserves	$10.499bn (30 April 2022). (75th)
All values, unless otherwise stated, are in US dollars.

The economy of Pakistan is the 24th-largest worldwide in terms of GDP based on purchasing power parity (PPP). According to 2021 estimate, Country has population of 227 million people (5th-largest worldwide), the nominal GDP of Pakistan stands at US$383 billion with a nominal GDP per capita of US$1,798 (172th worldwide); its GDP based on PPP stands at US$1.468 trillion with a GDP (PPP) per capita of US$6,469 (156th worldwide).

Pakistan is a developing country with a semi-industrial economy. Primary export commodities include textiles, leather goods, sports equipment, chemicals, and carpets/rugs.

The growth poles of Pakistan's economy are situated along the Indus River; the diversified economies of Karachi and major urban centres in Punjab, co-existing with lesser developed areas in other parts of the country. The Pakistani economy has suffered in the past from internal political turmoil, a rapidly growing population, and mixed levels of foreign investment. 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 is currently undergoing a process of economic liberalization, including the privatization of all government corporations, which is aimed at attracting foreign investment and decreasing budget deficits.

As of May 2021, the Pakistani government has predicted that future growth rates will be 5 percent—one of the highest in South Asia. According to the World Bank, the levels of poverty in Pakistan fell from 64.3 percent in 2001 to 21.9 percent in 2018. The country's improving macroeconomic position has led the Moody's Investors Service to upgrade Pakistan's debt outlook to "stable".

In 2017, Pakistan's GDP (PPP) crossed US$1 trillion. In 2021, the estimated GDP (PPP) stood at US$1.33 trillion. Current account deficit is one of the challenges that the country's economy is managing after hikes in the prices of international commodities. By May 2019, the Pakistani rupee had undergone a year-on-year depreciation of 30 percent vis-à-vis the United States dollar. 2020 saw the beginning of Phase 2 of the China–Pakistan Economic Corridor, with new billion-dollar agreements.

Economic history

Main article: Economic history of Pakistan

First five decades

Pakistan was a predominantly agricultural country when it gained independence in 1947 as a result of partition of India by the departing British. 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.

Background

Pakistan's economy in the period 2008-2012 been characterised as unstable and highly vulnerable to external and internal shocks. However, the economy proved to be unexpectedly resilient in the face of multiple adverse events concentrated into a four-year (1998–2002) period:

• the Asian financial crisis;
• economic sanctions – according to Colin Powell, Pakistan was "sanctioned to the eyeballs";
• the global recession of 2001–2002;
• a severe drought – the worst in Pakistan's history, lasting about four years;
• the post-9/11 military action in neighbouring Afghanistan, with a massive influx of refugees from that country;
• terrorism has also severely impacted the economy.

Macroeconomic reform and prospects

According to many sources, the Pakistani government has made substantial economic reforms since 2000, and medium-term prospects for job creation and poverty reduction are the best in nearly a decade.

In 2005, the World Bank reported that

"Pakistan was the top reformer in the region and the number 10 reformer globally – making it easier to start a business, reducing the cost to register property, increasing penalties for violating corporate governance rules, and replacing a requirement to license every shipment with two-year duration licences for traders."

Doing business

The World Bank (WB) and International Finance Corporation's flagship report Ease of Doing Business Index 2020 ranked Pakistan 108 among 190 countries around the globe, indicating a continuous improvement and taking a jump from 136 last year. The top five countries were New Zealand, Singapore, Denmark, Hong Kong and South Korea.

With improvement in ease of doing business ranking and giving an investment friendly road map from government, many new auto sector giants like France's Renault, South Korean's Hyundai and Kia, Chinese JW Forland and German auto giant Volkswagen are considering entry in Pakistan auto market through joint ventures with local manufacturers like Dewan Farooque Motors, Khalid Mushtaq Motors and United Motors. As of March 2022, only the Hyundai Nishat JV materialised.

US oil and gas giant Exxon Mobil has again returned to Pakistan after nearly three decades gap and has acquired 25% shares in offshore drilling in May 2018, with initial survey showing a potential of huge hydrocarbon reserves discovery at offshore.

To boost Pakistan's unstable foreign-exchange reserves, Qatar announced to invest $3 billion the form of deposits and direct investments in the country. By the end of June 2019, Qatar sent the first $500 million to Pakistan.

Data

Gross domestic product (GDP)

See also: List of Pakistani provinces by gross domestic product

The following table shows the main economic indicators from 1980 to 2021. Inflation below 5% is in green.

Fiscal year	Real GDP growth rate	GDP at current prices (Billion PKR)	US$ to PKR exchange rates	Nominal GDP (Billion US$)	Per capita income (US$)	inflation	Govt. debt to GDP %
FY 1980	7.33%	235.168	9.91	23.730	314	11.9%	n/a
FY 1981	6.40%	278.196	9.91	28.072	363	11.9%	n/a
FY 1982	7.56%	324.159	9.91	32.710	409	5.9%	n/a
FY 1983	6.79%	364.387	12.71	28.669	358	6.4%	n/a
FY 1984	3.97%	419.802	13.48	31.142	374	6.1%	n/a
FY 1985	8.71%	472.157	15.15	31.165	360	5.6%	n/a
FY 1986	6.36%	514.532	16.14	31.879	358	3.5%	n/a
FY 1987	5.81%	572.479	17.18	33.322	358	4.7%	n/a
FY 1988	6.44%	675.389	17.60	38.374	385	8.8%	n/a
FY 1989	4.81%	769.745	19.22	40.049	388	7.9%	n/a
FY 1990	4.59%	855.943	21.45	39.904	390	9.1%	n/a
FY 1991	5.42%	1,016.724	22.42	45.349	424	12.6%	n/a
FY 1992	7.57%	1,205.204	24.84	48.519	437	4.8%	n/a
FY 1993	2.10%	1,332.841	25.96	51.342	450	9.8%	n/a
FY 1994	4.37%	1,561.104	30.16	51.761	440	11.3%	n/a
FY 1995	5.06%	1,865.922	30.85	60.484	504	13.0%	n/a
FY 1996	6.60%	2,120.173	33.57	63.157	508	10.8%	n/a
FY 1997	1.70%	2,428.312	38.99	62.280	487	12.8%	n/a
FY 1998	3.49%	2,677.656	43.19	61.997	473	6.8%	n/a
FY 1999	4.18%	2,938.379	46.79	62.799	468	5.7%	n/a
FY 2000	3.91%	4,243.393	51.77	81.966	589	3.6%	n/a
FY 2001	3.65%	4,627.582	58.44	79.185	558	4.4%	78.3%
FY 2002	2.37%	4,920.549	61.43	80.100	562	3.5%	72.7%
FY 2003	5.64%	5,374.415	58.50	91.870	644	3.1%	66.4%
FY 2004	7.70%	6,203.725	57.57	107.759	735	4.6%	59.6%
FY 2005	7.52%	7,126.194	59.34	120.090	802	9.3%	54.4%
FY 2006	5.56%	8,216.160	59.86	137.256	900	7.9%	48.7%
FY 2007	5.54%	9,239.786	60.63	152.396	979	7.8%	47.0%
FY 2008	4.99%	10,637.772	62.55	170.068	1053	12.0%	53.1%
FY 2009	0.36%	13,199.707	78.50	168.149	1026	17.0%	54.6%
FY 2010	2.58%	14,866.996	83.80	177.410	1072	10.1%	56.6%
FY 2011	3.62%	18,276.440	85.50	213.759	1274	13.7%	54.3%
FY 2012	3.84%	20,046.500	89.24	224.635	1320	11.0%	59.3%
FY 2013	3.68%	22,385.657	96.73	231.424	1334	7.4%	60.1%
FY 2014	4.05%	25,168.805	102.86	244.689	1389	8.6%	58.1%
FY 2015	4.06%	27,443.022	101.29	270.935	1514	4.5%	58.3%
FY 2016	4.56%	32,725.049	104.24	313.939	1640	2.9%	54.5%
FY 2017	4.61%	35,552.819	104.70	339.568	1723	4.8%	55.2%
FY 2018	6.10%	39,189.810	109.84	356.789	1768	4.7%	58.7%
FY 2019	3.12%	43,798.401	136.09	321.834	1578	6.8%	67.4%
FY 2020	-1.00%	47,521.525	158.03	300.712	1457	10.7%	69.9%
FY 2021	5.57%	55,488.010	160.02	346.756	1666	8.9%	64.3%

Stock market

Main article: Pakistan Stock Exchange

In the first four years of the twenty-first century, Pakistan's KSE 100 Index was the best-performing stock market index in the world as declared by the international magazine "Business Week". The stock market capitalisation of listed companies in Pakistan was valued at $5,937 million in 2005 by the World Bank. But in 2008, after the General Elections, uncertain political environment, rising militancy along western borders of the country, and mounting inflation and current account deficits resulted in the steep decline of the Karachi Stock Exchange. As a result, the corporate sector of Pakistan has declined dramatically in recent times. However, the market bounced back strongly in 2009 and the trend continues in 2011. By 2014 the stock market burst into uncharted territories as the benchmark KSE 100 Index rose 907 points (3.1%) and shot past the 30,000-point barrier to close at a new record high, this came days after Moody's announced that it was upgrading the outlook of 5 major Pakistani banks from Negative to Stable, resulting in heavy buying in the banking sector. The rally was supported by heavy buying in the oil and gas and cement sectors. On 11 January 2016, aimed to help reduce market fragmentation and create a strong case for attracting strategic partnerships necessary for providing technological expertise all the three stock exchanges including Karachi Stock Exchange, Lahore Stock Exchange and Islamabad Stock Exchange were inducted into a unified Pakistan Stock Exchange. In May 2017 American provider of stock market indexes and analysis tools, MSCI has confirmed that the Pakistan Stock Exchange (PSX) has been reclassified from Frontier Markets to Emerging Markets in its semi-annual index review. Euphoria over the stock exchange's reclassification as an emerging market propelled the PSE-100 Index past another milestone when the Index recorded an increase of 636.96 points, or 1.23%, to end at 52,387.87. In the fiscal year 2018, the stock market showed a negative growth of 7.1% over the last fiscal year and stood at 47000 points at average. Pakistan's stock market's performance has been remarkable in FY2021. During July 2020 to April 2021 period, the benchmark KSE-100 index improved from 34,889.41 points to 44262.35 points. Pakistan Stock exchange also successfully powered through initial COVID-19 induced economic downturn and earned the title of being the ‘best Asian stock market and fourth best-performing market across the world in 2020.’ The KSE-100 index continued to climb throughout the year. The increase in the KSE-100 Index was driven by government's large stimulus package, central bank's stable policy rate, an uptick in large scale manufacturing, improvement in external accounts and reforms introduced by the Security and Exchange Commission of Pakistan (SECP) and PSX in the wake of COVID-19.

PSX 100 index growth rate

List	2005–2006	2006–2007	2007–2008	2008–2009	2009–2010	2010–2011	2011–2012	2012–2013	2013–2014	2014–2015	2015–2016	2016–2017	2017–2018	2018–2019	2019-2020	2020-2021
PSX 100 index growth %	34.1	37.9	-10.8	-41.7	35.7	28.5	10.4	52.2	41.2	16.0	9.8	23.2	-10.0	-20.5	1.5	29.5

Middle class

See also: Labour force of Pakistan

As of 2017, according to Wall Street Journal, citing estimates largely based on income and the purchase of consumption goods, had suggested that as many as 42% of Pakistan's population may now belong to the upper and middle classes. If these numbers are correct, or even indicative in any broad sense, then 87 million Pakistanis belong to the middle and upper classes, a population size which is larger than that of Germany. Official figures also show that the proportion of households that own a motorcycle and washing machines has grown impressively over the past 15 years. Furthermore, the IBA-SBP Consumer Confidence Index recorded its highest-ever level of 174.9 points in January 2017, showing an increase of 17 points from July 2016.

Separately, consumer financing posted an increase of Rs37.6 billion during first half of the current fiscal year of 2017. Auto finance continued to be the dominated segment, while personal loans showed a pickup as well. "The net credit off-take of Rs13.7 billion of personal loans witnessed in first half of the fiscal year 2017 is the highest half-year figure in about a decade," the report stated.

Poverty alleviation expenditures

Main article: Poverty in Pakistan

Pakistan government spent over 1 trillion rupees (about $16.7 billion) on poverty alleviation programmes during the past four years, cutting poverty from 35% in 2000–01 to 29.3% in 2013 and 17% in 2015. Rural poverty remains a pressing issue, as development there has been far slower than in the major urban areas.

Employment

The high population growth in the past few decades has ensured that a very large number of young people are now entering the labor market. Even though it is among the six most populous Asian nations. In the past, excessive red tape made firing from jobs, and consequently hiring, difficult. Significant progress in taxation and business reforms has ensured that many firms now are not compelled to operate in the underground economy.

"In 2016 government took a remarkable initiative by announcing the Prime Minister's Youth Program to combat unemployment in the country. This program has a broad canvas of schemes enabling youth and poor segment of society to get better employment opportunities, economic empowerment, acquiring skills needed for gainful employment, access to IT and imparting on-the-job training for young graduates to improve the probability of getting a productive job. Prime Minister's Youth Program includes six schemes which are Prime Minister's Youth Business Loan Scheme, Prime Minister's Interest Free Loan Scheme, Prime Minister's Youth Skill Development Program, Prime Minister's Program for Provision of Laptops to Talented Students, Prime Minister's Fee Reimbursement Scheme,Prime Minister's Youth Training Scheme". Government sector is also contributing in employment and according to estimate 4.5 million people are employed by federal, provincial and local governments in different sectors from Armed forces to education and health.

Tourism

Main article: Tourism in Pakistan

Tourism in Pakistan has been stated as being the tourism industry's "next big thing". Pakistan, with its diverse cultures, people and landscapes, has attracted 90 million tourists to the country, almost double to that of a decade ago. Currently, Pakistan ranks 130th in the world by tourist income. Due to threat of terrorism the number of foreigner tourists has gradually declined and the shock of 2013 Nanga Parbat tourist shooting has terribly adversely effected the tourism industry. As of 2016, tourism has begun to recover in Pakistan, albeit gradually, with a current global rank of 130.

Government revenues and expenditures

Main article: Taxation in Pakistan

Although the country is a Federation with constitutional division of taxation powers between the Federal Government and the four provinces, the revenue department of the Federal Government, the Federal Board of Revenue, collects more than 80% of the entire national tax collection.

Data is taken from Ministry of Finance.

Consolidated Federal and Provincial Fiscal Operations (Amounts in billion PKR)

List	FY 2005	FY 2006	FY 2007	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021
Total Revenues	900.0	1076.6	1298.0	1499.4	1850.9	2077.8	2252.9	2566.5	2982.4	3637.3	3931.0	4447.0	4936.7	5228.0	4900.7	6272.2	6903.4
Tax revenue	632.6	753.0	919.3	1065.2	1316.7	1472.5	1699.3	2052.9	2199.2	2564.5	3017.6	3660.4	3969.2	4467.2	4473.4	4747.8	5272.7
FBR taxes	590.4	713.4	847.2	1008.1	1161.2	1327.4	1558.0	1882.7	1946.4	2254.5	2590.0	3112.5	3367.9	3842.1	3829.5	3997.9	4764.3
Total Expenditures	1117.0	1401.8	1675.5	2276.5	2531.3	3007.2	3447.3	3936.2	4816.3	5026.0	5387.8	5796.3	6800.5	7488.4	8345.6	9648.5	10306.7
Fiscal Deficit	217.0	325.2	377.5	777.2	680.4	929.4	1194.4	1369.7	1833.9	1388.7	1456.7	1349.3	1863.8	2260.4	3444.9	3376.3	3403.3
As % of GDP
Total revenue	13.8	13.1	14.0	14.1	14.0	14.0	12.3	12.8	13.3	14.5	14.3	13.6	13.9	13.3	11.2	13.2	12.4
Tax revenue	10.1	9.8	9.6	9.9	9.1	9.9	9.3	10.2	9.8	10.2	11.0	11.2	11.2	11.4	10.2	10.0	9.5
Total expenditure	17.2	17.1	18.1	21.4	19.2	20.2	18.9	21.4	21.5	20.0	19.6	17.7	19.1	19.1	19.1	20.3	18.6
Fiscal deficit	3.3	4.0	4.1	7.3	5.2	6.2	6.5	8.8	8.2	5.5	5.3	4.1	5.2	5.8	7.9	7.1	6.1

Currency system

Main article: Pakistani rupee

Rupee

The basic unit of currency is the rupee, ISO code PKR and abbreviated Rs, which is divided into 100 paisas. Currently, 5,000 rupee note is the largest denomination in circulation. From 13 August 2005, the SBP started introducing its fifth generation design of banknotes with additional security features, with the Rs. 20 note being the first issuance. New designs of Rs. 5 (July 2008, later replaced by a coin) 10 (May 2006), Rs. 20 (March 2008, new color scheme), Rs. 50 (July 2008), Rs. 100 (November 2006), Rs. 500 (January 2010), Rs. 1000 (February 2007) and Rs. 5000 (May 2006) were gradually introduced.

The Pakistani rupee was pegged to the pound sterling until 1982, when the government of General Zia-ul-Haq, changed it to a managed float regime. As a result, the rupee devalued by 38.5% between 1982/83 many of the industries built by his predecessor suffered with a huge surge in import costs. After years of appreciation under Zulfikar Ali Bhutto and despite huge increases in foreign aid, the rupee depreciated.

Foreign exchange rate

The Pakistani rupee depreciated against the US dollar until around the start of the 21st century, when Pakistan's large current-account surplus pushed the value of the rupee up versus the dollar. Pakistan's central bank then stabilised by lowering interest rates and buying dollars, in order to preserve the country's export competitiveness.

US$ to PKR average exchange rates

2005	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021
59.3575	59.8565	60.6341	62.5464	78.4982	83.8016	85.5017	89.2359	96.7272	102.8591	101.2947	104.2351	104.6971	109.8444	136.0901	158.0253	160.0219

Foreign exchange reserves

Pakistan maintains foreign reserves with State Bank of Pakistan. The currency of the reserves was solely US dollar incurring speculated losses after the dollar prices fell during 2005, forcing the then Governor SBP Ishrat Hussain to step down. In the same year, the SBP issued an official statement proclaiming diversification of reserves in currencies including Euro and Yen, withholding ratio of diversification.

Following the international credit crisis and spikes in crude oil prices, Pakistan's economy could not withstand the pressure and on 11 October 2008, State Bank of Pakistan reported that the country's foreign exchange reserves had gone down by $571.9 million to $7749.7 million. The foreign exchange reserves had declined more by $10 billion to a level of $6.59 billion. In June 2013, Pakistan was on the brink of default on its financial commitments. The country's forex reserves were at a historic low covering only two weeks' worth of imports. In January 2020, Pakistan's Foreign exchange reserves stood at US$11.503 billion.

Amounts in million US dollars

List	Jun 2005	Jun 2006	Jun 2007	Jun 2008	Jun 2009	Jun 2010	Jun 2011	Jun 2012	Jun 2013	Jun 2014	Jun 2015	Jun 2016	Jun 2017	Jun 2018	Jun 2019	Jun 2020	Jun 2021
Foreign exchange reserves	12,598	13122	15,647	11,399	12,425	16,750	18,244	15,289	11,020	14,141	18,699	23,099	21,403	16,384	14,482	18,886	24,397
Net reserves with SBP	9804.7	10765.2	13345.4	8577.0	9117.9	12958.2	14783.6	10803.3	6008.4	9097.5	13525.7	18142.6	16144.8	9765.2	7285.2	12132.0	17297.6
Net reserves with banks	2792.9	2357.2	2301.8	2821.7	3307.3	3792.2	3460.2	4485.4	5011.1	5043.6	5173.5	4955.9	5258.1	6618.4	7196.4	6754.4	7099.0

Structure of economy

See also: Economic liberalisation in Pakistan

Agriculture accounted for about 53% of the GDP in 1947. While per-capita agricultural output has grown since then, it has been outpaced by the growth of the non-agricultural sectors, and the share of agriculture has dropped to roughly one-fifth of Pakistan's economy. In recent years, the country has seen rapid growth in industries (such as apparel, textiles, and cement) and services (such as telecommunications, transportation, advertising, and finance).

Sectoral Shares % in GDP (at constant basic prices)

Sectors	FY 2000	FY 2005	FY 2010	FY 2015	FY 2020	FY 2021
Agricultural	27.08	23.98	22.03	20.71	23.54	23.08
Industrial	19.31	21.34	21.04	20.67	18.52	18.91
Services	53.61	54.68	56.93	58.61	57.93	58.01

Major sectors

Agriculture

Main article: Agriculture in Pakistan

A mango orchard in Multan, Pakistan

Majority of the population, directly or indirectly, dependent on this sector. It contributes about 19.2% percent of gross domestic product (GDP) and accounts for 37.4% of employed labor force in 2021 and is the largest source of foreign exchange earnings. The most important crops are wheat, sugarcane, cotton, and rice, which together account for more than 75% of the value of total crop output. Pakistan's largest food crop is wheat. In 2017, Pakistan produced 26,674,000 tonnes of wheat, almost equal to all of Africa (27.1 million tonnes) and more than all of South America (25.9 million tonnes), according to the FAOSTAT. In the previous market year of 2018/19 Pakistan exported a record 4.5 million tonnes of rice as compared to around 4 MMT during the corresponding period last year.

Pakistan is a net food exporter, except in occasional years when its harvest is adversely affected by droughts. Pakistan exports rice, cotton, fish, fruits (especially Oranges and Mangoes), and vegetables and imports vegetable oil, wheat, pulses and consumer foods. The economic importance of agriculture has declined since independence, when its share of GDP was around 53%. Following the poor harvest of 1993, the government introduced agriculture assistance policies, including increased support prices for many agricultural commodities and expanded availability of agricultural credit. From 1993 to 1997, real growth in the agricultural sector averaged 5.7% but has since declined to about 4%. Agricultural reforms, including increased wheat and oil seed production, play a central role in the government's economic reform package.

Data is from Ministry of Finance and Pakistan Bureau of Statistics.

List	FY 2004	FY 2005	FY 2006	FY 2007	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021
Agriculture growth (%)	2.85	7.02	1.27	3.42	1.81	3.50	0.23	1.96	3.62	2.68	2.50	2.13	0.15	2.22	3.88	0.94	3.91	3.48
Production of Important Crops (Million Tonnes)
Wheat	19.5	21.6	21.3	23.3	20.9	24.0	23.3	25.2	23.5	24.2	26.0	25.1	25.6	26.7	25.1	24.3	25.2	27.3
Rice	4.8	5.0	5.5	5.4	5.6	6.9	6.9	4.8	6.2	5.6	6.8	7.0	6.8	6.8	7.5	7.2	7.4	8.4
Sugarcane	53.4	47.2	44.7	54.7	63.9	50.0	49.4	55.3	58.4	63.8	67.5	62.8	65.5	75.5	83.3	67.2	66.4	81.0
Cotton *	10.0	14.3	13.0	12.9	11.7	11.8	12.9	11.5	13.6	13.0	12.8	14.0	9.9	10.7	11.9	9.9	9.1	7.1
Maize	1.9	2.8	3.1	3.1	3.6	3.6	3.3	3.7	4.3	4.2	5.0	4.9	5.3	6.1	5.9	6.8	7.9	8.5

* cotton production in million bales.

Pakistan's principal natural resources are arable land and water. About 25% of Pakistan's total land area is under cultivation and is watered by one of the largest irrigation systems in the world. Pakistan irrigates three times more acres than Russia. Pakistan agriculture also benefits from year round warmth. Zarai Taraqiati Bank Limited is the largest financial institution geared towards the development of agriculture sector through provision of financial services and technical expertise.

During 2017–18, agriculture sector recorded a remarkable growth of 4.00 percent and surpassed its targeted growth of 3.5 percent and last year's growth of 2.18 percent. All the major crops showed a positive trend in their production except maize. Sugarcane and rice production surpassed their historic level with 83.3 and 7.5 million tons respectively. Pakistan Bureau of Statistics provisionally valued this sector at Rs. 11,542,998 million for the year 2021 thus registering the growth of 20.1% over the last year. Again in 2018–19, Agriculture sector did not hit its target growth and only grew by 0.56%. Major crops except maize fell below their previous year output. The agriculture sector's performance during 2020-21 broadly stands encouraging as it grows by 2.77 percent against the target of 2.8 percent. The production of major Kharif crops 2020, such as sugarcane, maize and rice indicated considerable improvement compared to last year and surpassed the production targets. The production of sugarcane increased by 22.0 percent to 81.009 million tonnes from 66.380 million tonnes, rice by 13.6 percent to 8.419 million tonnes from 7.414 million tonnes and maize by 7.4 percent to 8.465 million tonnes from 7.883 million tonnes. However, the cotton crop suffered mainly due to decline in area sown, heavy monsoon rains and pest attacks. The cotton production reduced by 22.8 percent, to 7.064 million bales from 9.148 million bales last year.

Mining

Main article: Mining in Pakistan

Pakistan is endowed with significant mineral resources and is emerging as a very promising area for prospecting/exploration for mineral deposits. Based on available information, the country's more than 6,00,000 km² of outcrops area demonstrates varied geological potential for metallic and non-metallic mineral deposits. In the wake of 18th amendment to the constitution all the provinces are free to exploit and explore the mineral resources which are in their jurisdiction. Mining and quarrying contributes 13.19% in industrial sector and its share in GDP is 2.4%.

In the recent past, exploration by government agencies as well as by multinational mining companies presents ample evidence of the occurrences of sizeable minerals deposits. Recent discoveries of a thick oxidised zone underlain by sulphide zones in the shield area of the Punjab province, covered by thick alluvial cover have opened new vistas for metallic minerals exploration. Pakistan has a large base for industrial minerals. The discovery of coal deposits having over 175 billion tonnes of reserves at Thar in the Sindh province has given an impetus to develop it as an alternative source of energy. There is vast potential for precious and dimension stones.

Extraction of principal minerals in the last 6 fiscal years is given in the table below :-

Minerals	Unit of quantity	2014–2015	2015–2016	2016–2017	2017–2018	2018–2019	2019-2020
Coal	Metric ton	3,406,851	3,749,312	3,953,992	4,477,555	5,406,878	8,428,237
Natural Gas	MMCFT	1,465,759	1,481,550	1,471,854	1,458,935	1,436,546	1,316,636
Crude Oil	JSB	34,490,000	31,652,000	32,269,000	32,557,000	32,495,000	28,091,000
Chromite	Metric ton	100,516	69,333	105,238	97,420	138,244	121,435
Magnesite	Metric ton	4,611	35,228	19,656	23,596	42,996	16,165
Dolomite	Metric ton	223,117	666,755	301,124	488,825	472,474	302,045
Gypsum	Metric ton	1,417,007	1,871,716	2,079,629	2,475,893	2,517,825	2,149,873
Limestone	Metric ton	40,470,357	46,123,367	52,149,137	70,818,725	75,596,328	65,809,924
Rock salt	Metric ton	2,136,361	3,552,984	3,534,075	3,653,746	3,799,106	3,368,978
Sulphur	Metric ton	19,730	14,869	23,740	22,040	20,715	19,948
Barytes	Metric ton	24,689	57,024	75,375	145,189	116,480	55,341
Soap stone	Metric ton	100,724	125,985	152,279	141,504	156,935	150,009
Marble	Metric ton	2,815,601	4,746,638	4,906,233	8,813,025	7,736,443	5,796,879
Bauxite	Metric ton	-	-	-	145,189	92,936	101,047
Quartz	Metric ton	38,117	90,588	98,909	125,014	112,308	4,592

Industry

Main article: Industry of Pakistan

Pakistan's industrial sector accounts for approximately 19.12% of GDP. In 2021 it recorded a growth of 3.57% as compared to the growth of negative 3.77% in 2020. Manufacturing is the largest of Pakistan's industrial sectors, accounting for approximately 12.13% of GDP. Manufacturing sub-sector is further divided in three components including large-scale manufacturing (LSM) with the share of 79.6% percent in manufacturing sector, small scale manufacturing share is 13.8 percent in manufacturing sector, while slaughtering contributes 6.5 percent in the manufacturing. Major sectors in industries include cement, fertiliser, edible oil, sugar, steel, tobacco, chemicals, machinery, food processing and medical instruments, primarily surgical. Pakistan is one of the largest manufacturers and exporters of surgical instruments.

Production of Selected Manufactured Goods

Manufactured Goods	Unit of quantity	2017	2018	2019	2020	2021
Cotton Yarn	Tons	3,428,000	3,430,000	3,431,000	3,060,000	3,442,000
Cotton Cloth	Million Meters	1,043	1,044	1,046	935	1,048
Jute Goods	Tons	60,000	74,000	67,000	65,000	70,000
Vegetable Ghee	Tons	1,280,000	1,347,000	1,392,000	1,454,000	1,436,000
Cooking Oil	Tons	390,000	391,000	406,000	442,000	457,000
Sugar	Tons	7,049,000	6,566,000	5,260,000	4,881,000	5,694,000
Cigarettes	Billion Numbers	34	59	61	46	52
Cement	Tons	37,022,000	41,148,000	39,924,000	39,121,000	49,803,000
Fertilizers	Tons	8,092,000	7,218,000	7,714,000	8,102,000	7,292,000
Chemicals	Tons	776,000	846,000	886,000	949,000	1,078,000
Paper & Board	Tons	669,000	731,000	704,000	707,000	730,000
Cycle Tyres & Tubes	Thousand	11,507	11,470	14,491	13,496	10,314
Motor Tyres & Tubes	Thousand	34,345	35,057	36,321	35,678	31,906
Tractors	Numbers	53,975	71,894	49,902	32,608	50,486
Trucks / Buses	Numbers	7,712	9,187	6,035	2,945	3,808
Motorcycle	Numbers	2,501,000	2,825,000	2,460,000	1,813,000	2,476,000
Bicycle	Numbers	200,000	200,000	174,000	141,000	79,000
Electric Transformers	Numbers	37,000	47,000	31,000	23,000	29,000

The government is privatizing large-scale industrial units, and the public sector accounts for a shrinking proportion of industrial output, while growth in overall industrial output (including the private sector) has accelerated. Government policies aim to diversify the country's industrial base and bolster export industries. Large Scale Manufacturing is the fastest-growing sector in Pakistani economy. Major Industries include textiles, fertiliser, cement, oil refineries, dairy products, food processing, beverages, construction materials, clothing, paper products and shrimp.

In Pakistan SMEs have a significant contribution in the total GDP of Pakistan, according to SMEDA and Economic survey reports, the share in the annual GDP is 40% likewise SMEs generating significant employment opportunities for skilled workers and entrepreneurs. Small and medium scale firms represent nearly 90% of all the enterprises in Pakistan and employ 80% of the non-agricultural labor force. These figures indicate the potential and further growth in this sector.

Data is from Pakistan Bureau of Statistics.

% growth

List	FY 2004	FY 2005	FY 2006	FY 2007	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021
Industrial sector	17.37	6.51	3.63	7.73	8.47	-5.21	3.42	4.51	2.55	0.75	4.53	5.18	5.69	4.61	9.18	0.25	-5.84	7.79
Manufacturing	16.38	16.03	9.39	9.03	6.10	-4.18	1.37	2.50	2.08	4.85	5.65	3.88	3.69	4.87	7.08	4.52	-7.80	10.49
Mining	21.78	-15.83	3.60	7.35	3.15	-2.46	2.75	-4.42	5.16	3.88	1.40	4.97	6.19	-0.89	7.26	0.54	-7.13	0.55
Construction	-6.86	16.78	17.00	12.91	15.36	-9.88	8.35	-8.56	3.08	1.08	5.96	7.26	13.68	10.20	19.55	-18.14	-4.04	5.33

Pakistan's largest corporations are mostly involved in utilities like oil, gas, electricity, automobile, cement, food, fertilizer, civil aviation, and telecommunication.

Their assets, sales and profit/loss for year 2019 is listed below:

Name	Type	Total Assets (Billion PKR)	Sales (Billion PKR)	Profit / (Loss) after Tax (Billion PKR)
Pakistan State Oil Co. Ltd.	Oil	417.080	1154.298	10.587
Sui Northern Gas Pipelines Limited	Gas	629.382	754.538	7.076
K-Electric	Electricity	598.865	289.119	17.274
Oil and Gas Development Co. Ltd.	Oil & Gas	766.597	261.481	118.386
Attock Petroleum Ltd.	Oil	46.403	223.054	3.961
Shell Pakistan Ltd.	Oil & Gas	56.175	199.719	(1.485)
Byco Petroleum	Oil	124.971	197.831	(2.292)
Sui Southern Gas Co. Ltd	Gas	385.996	177.404	(14.804)
Attock Refinery Ltd.	Oil	110.733	176.839	(6.517)
Pakistan International Airlines Corporation Ltd.	Civil Aviation	298.799	164.646	(56.037)
Pakistan Petroleum Ltd.	Oil	458.291	163.890	61.632
National Refinery Ltd.	Oil	76.167	160.906	(11.029)
Indus Motor Co. Ltd.	Automobile	64.783	157.997	13.715
Hascol Petroleum Ltd	Oil	87.554	156.335	(25.877)
Lucky Cement Ltd.	Cement	227.021	136.592	12.347
Pakistan Telecommunication Co. Ltd.	Telecommunication	345.818	129.543	2.377
Engro Fertilizers Ltd.	Fertilizer	127.047	121.355	16.871
Mari Petroleum Co. Ltd	Oil	220.062	117.542	24.327
Pak Suzuki Motor Co. Ltd.	Automobile	77.660	116.548	(2.920)
Nestle Pakistan Ltd.	Food	65.273	115.962	7.354
Pakistan Refinery Ltd.	Oil	42.881	115.741	(5.821)
Fauji Fertilizer Co. Ltd.	Fertilizer	185.388	109.817	17.334

Cement Industry

In 1947, Pakistan had inherited four cement plants with a total capacity of 0.5 million tons. Some expansion took place in 1956–66 but could not keep pace with the economic development and the country had to resort to imports of cement in 1976–77 and continued to do so until 1994–95. The cement sector consisting of 27 plants is contributing above Rs 30 billion to the national exchequer in the form of taxes. However, by 2013, Pakistan's cement is fast-growing mainly because of demand from Afghanistan and countries boosting real estate sector. The government has introduced an incentive package for the construction industry in April 2020, which stimulated the industry especially the private sector housing projects. Package included amnesty scheme, tax exemptions and Rs 36 billion subsidy for Naya Pakistan Housing Scheme. Further, banks were directed to increase construction sector loans to 5 percent of their total loan book and FED reduction on cement from Rs 2/kg to Rs 1.5/kg have given impetus to this industry.

Cement production capacity & dispatches (million tonnes)

Indicators	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020
Production Capacity	30.50	37.68	42.28	45.34	42.37	44.64	44.64	44.64	45.62	45.62	46.39	48.66	59.74	63.63
Local Dispatches	21.03	22.58	20.33	23.57	22.00	23.95	25.06	26.15	28.20	33.00	35.65	41.15	40.34	39.97
Exports	3.23	7.72	10.98	10.65	9.43	8.57	8.37	8.14	7.20	5.87	4.66	4.75	6.54	7.85
Total Dispatches	24.26	30.30	31.31	34.22	31.43	32.52	33.43	34.28	35.40	38.87	40.32	45.89	46.88	47.81

Fertilizer industry

Fertilizer is an important and costly input responsible for 30 to 50 percent increase in the crop productivity. The overall objective is sustainability and growth in agricultural sector that should match the growing population for food security and the promotion of economic growth. There are nine urea manufacturing plants, one DAP, three NP, four SSP, two CAN, one SOP and two plants of blended NPKs having a total production capacity of 9,172 thousand tonnes per annum in 2021. Urea is main fertilizer having 70 percent share in total production. Installed production capacity of 6,307 thousand tonnes per annum is enough to meet local demand subject to the availability of uninterrupted gas and RLNG supply.

Defence industry

Main article: Defence industry of Pakistan

The defence industry of Pakistan, under the Ministry of Defence Production, was created in September 1951 to promote and coordinate the patchwork of military production facilities that have developed since independence. It is currently actively participating in many joint production projects such as Al Khalid 2 tank, advance trainer aircraft, combat aircraft, navy ships, and submarines. Pakistan is manufacturing and selling weapons to over 40 countries, bringing in $20 million annually. The country's arms imports increased by 119 percent between 2004–2008 and 2009–13, with China providing 54pc and the USA 27pc of Pakistan's imports.

Textiles industry

Main article: Textile industry in Pakistan

Most of the Textile Industry is established in Punjab. Before 1990, the situation was different; most of the industry was in Karachi. Textile industry in Pakistan is traditional and conservative, producing and exporting most of low cost raw articles e.g. raw cotton, yarn, fabric etc. Share of finished goods and branded articles is nominal. Pakistan has a potential to quadruple its textile production and export, due to emerging Chinese markets and with its existing infrastructure. 2.7% of United States imports of clothing and other textiles is from Pakistan.

Textile is the most important manufacturing sector of Pakistan and has the longest production chain, with inherent potential for value addition at each stage of processing, from cotton to ginning, spinning, fabric, dyeing and finishing, made-ups and garments. This sector contributes nearly one-fourth of industrial value-added and provides employment to about 40 percent of industrial labor force. Barring seasonal and cyclical fluctuations, textiles products have maintained an average share of about 60 percent in national exports.

Automobile Industry

Main article: Automotive industry in Pakistan

The auto sector constitutes about 7 percent to LSM in 2021, which accounts for the significant industrial output of the country. According to PBS, automobile recorded 23.4 percent upsurge during July–March FY2021. In 2021, government has announced Pakistan's new Auto Policy 2021–2026. Given government support, removal of irritants is soon going to bear fruits in the wake of industrial expansion as many new investors have joined with commercial production while the existing players have already made huge investments and a lot more is in waiting. Among the automakers that are yet to start production, Proton, MG, and Volkswagen are the names that could make a significant impact in the local passenger vehicle market. Meanwhile, KIA, Hyundai, Changan, and Prince DFSK have already started productions in Pakistan.

Production & Sale of Vehicles

Type		FY 1996	FY 2001	FY 2006	FY 2011	FY 2016	FY 2021
Car	Production	33,419	41,556	170,487	133,972	179,944	151,794
	Sales	0	40,310	165,965	127,944	181,145	151,182
Truck	Production	2,994	912	4,518	2,901	5,666	3,808
	Sales	~	925	4,273	2,942	5,550	3,695
Bus	Production	474	1,326	825	490	1,070	570
	Sales	~	1,384	927	515	1,017	652
Jeep	Production	2,274	459	2,472	883	773	11,328
	Sales	~	432	2,520	807	775	11,306
LCV/Pick-UP	Production	2,682	4,982	19,152	19,142	35,836	19,744
	Sales	~	5,041	18,951	17,746	35,759	18,909
Farm Tractor	Production	16,093	31,635	48,887	70,770	34,914	50,751
	Sales	~	31,121	48,802	69,203	33,986	50,920
2/3 Wheelers	Production	0	108,850	520,124	838,665	1,362,096	1,902,415
	Sales	0	108,649	516,640	835,455	1,358,643	1,903,932

Note: These figures do not include the production / sale of companies which are not members of Pakistan Automotive Manufacturers Association (PAMA).

After the entry of new models and brands by new entrants and due to the significant low benchmark interest rate of 7%, the consumer financing hit an all-time high in 2021. This trend started when a new Automotive Development Policy (2016-2021) was first approved by the ECC in its meeting held on March 18, 2016.

Such growth in demand for car financing was last seen during President Pervez Musharraf's regime (2001-2008) when banks, having ample liquidity, lent significant amount for cars without checking borrowers’ capabilities whether they were able to repay the debt. Later on, the car financing bubble busted when a large number of people defaulted on paying off the car financing.

Outstanding Loans of Consumer Financing for Automobiles (Billion PKR)

Jun 2006	Jun 2007	Jun 2010	Jun 2015	Jun 2016	Jun 2017	Jun 2018	Jun 2019	Jun 2020	Jun 2021	Dec 2021
97.777	105.444	64.199	85.123	111.960	154.248	193.597	215.461	211.113	308.096	353.639

Services

Pakistan's service sector accounts for about 61.7% of GDP. Transport, storage, communications, finance, and insurance account for 24% of this sector, and wholesale and retail trade about 30%. Pakistan is trying to promote the information industry and other modern service industries through incentives such as long-term tax holidays.

Data is from Pakistan Bureau of Statistics.

% growth

List	FY 2005	FY 2006	FY 2007	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021
Service sector	8.14	8.20	5.58	4.94	1.33	3.21	3.94	4.40	5.13	4.46	4.36	5.72	5.62	5.95	5.00	-1.28	5.70

Telecommunication

Main article: Telecommunications in Pakistan

PTCL's One Stop Shop in Islamabad

After the deregulation of the telecommunication industry, the sector has seen an exponential growth. Pakistan Telecommunication Company Ltd has emerged as a successful Forbes 2000 conglomerate with over US$1 billion in sales in 2005. The mobile telephone market has exploded many-fold since 2003 to reach a subscriber base of 140 million users in July 2017, one of the highest mobile teledensities in the entire world. Pakistan won the prestigious Government Leadership award of GSM Association in 2006.

In Pakistan, the following are the top mobile phone operators:

1. Jazz Pakistan (parent: VEON, Netherlands)
2. Ufone (parent: PTCL (Etisalat), Pakistan/UAE)
3. Telenor (parent: Telenor, Norway)
4. Zong (parent: China Mobile, China)

By March 2009, Pakistan had 91 million mobile subscribers – 25 million more subscribers than reported in the same period in 2008. In addition to the 3.1 million fixed lines, while as many as 2.4 million are using Wireless Local Loop connections. Sony Ericsson, Nokia and Motorola along with Samsung and LG remain the most popular brands among customers.

Since liberalisation, over the past four years from 2003 to 2007 the Pakistani telecom sector has attracted more than $9 billion in foreign investments. During 2007–08, the Pakistani communication sector alone received $1.62 billion in Foreign Direct Investment (FDI) – about 30% of the country's total foreign direct investment.

Present growth of state-of-the-art infrastructures in the telecoms sector during the last four years has been the result of the PTA's vision and implementation of the deregulation policy. Paging and mobile (cellular) telephones were adopted early and freely. Cellular phones and the Internet were adopted through a rather laissez-faire policy with a proliferation of private service providers that led to the fast adoption. With a rapid increase in the number of Internet users and ISPs, and a large English-speaking population, Pakistani society has seen an unparalleled revolution in communications.

According to the PC World, a total of 6.37 billion text messages were sent through Acision messaging systems across Asia Pacific over the 2008/2009 Christmas and New Year period. Pakistan was amongst the top five ranker with one of the highest SMS traffic with 763 million messages. On 14 August 2010, Pakistan became the first country in the world to experience EVDO's RevB 3G technology that offers maximum speeds of 9.3 Mbit/s. 3G and 4G was simultaneously launched in Pakistan on 23 April 2014 through a SMRA auction. Three out of five companies got a 3G licence i.e. Ufone, Mobilink and Telenor while China Mobile's Zong got 3G as well as a 4G licence. Whereas fifth company, Warid Pakistan did not participate in the auction procedure, But they launched 4G LTE services on their existing 2G 1800 MHz spectrum due to Technology neutral terms and became world's first Telecom Company to transform directly from 2G to 4G. With that Pakistan joined the 3G and 4G world. In December 2017, 3G and 4G subscribers in Pakistan reached to 46 millions.

After the successful implementation of Device Identification Registration and Blocking System (DIRBS) in 2019 along with comprehensive mobile manufacturing policy created a favorable environment for mobile device manufacturing in Pakistan. For the first time in history of Pakistan, local mobile phone manufacturing exceeded the number of mobile phones that were imported in 2021. Mobile Device Manufacturing (MDM) licence have been issued to 26 companies including the world famous Samsung, Nokia, Oppo, TECNO, Infinix, Vgotel, Q-mobile etc.

PTA Reports

Indicators	2003	2004	2005	2006	2007	2017	2018	2019	2020	2021
Teledensity	4.31%	6.25%	11.9%	26.24%	44.06%	72.4%	73.6%	77.8%	78.6%	85.3%
Cellular Mobile Subscribers (Millions)	2.4	5.0	12.7	34.5	62.3	139.8	150.2	161.0	168.6	184.2
Broadband Subscribers (Millions)				0.03	0.05	44.8	58.7	71.5	83.9	102.7
Broadband Penetration				0.0%	0.0%	22.7%	28.1%	33.8%	38.5%	46.6%
Cellular Mobile Data Usage (Petabytes)						690	1,262	2,493	4,510	6,855
Telecom Revenues ( Billion PKR)		117.6	144.2	194.6	235.6	528.0	539.7	604.3	591.7	644.1
Telecom contribution to exchequer (Billion PKR)	30.0	38.0	67.1	77.1	100.0	160.9	169.0	115.0	290.1	225.8
Total Telecom investment ( Million US $ )			1,472.8	1,731.1	4,108.8	1,133.3	860.8	677.9	1,129.1	1,094.3
Mobile (CBU) imports (Million units)						18.11	12.07	16.28	24.51	10.06
Local Assembly / Manufacturing (Million units)						0.17	5.2	11.74	13.05	24.65

Transportation

Main article: Transportation in Pakistan

Air linkage

The year 1955 marked the inauguration of the Pakistan airline's first scheduled international service – to the glittering, glitzy capital city of London, via Cairo and Rome. In 1959, the Government of Pakistan appointed Air Commodore Nur Khan as the managing director of PIA. With his visionary leadership, PIA ‘took off’ and within a short span of 6 years, gained the stature and status of one of the world's frontline carriers. In aviation circles, this period has often been referred to as the "golden years of PIA".On 29 April 1964, with a Boeing 720B, PIA earned the distinction of becoming the first airline from a non-communist country to fly into the People's Republic of China. Private sector airlines in Pakistan include Airblue, which serves the main cities within Pakistan in addition to destinations in the Persian Gulf and Manchester in the United Kingdom.

PIA Annual Reports

Indicators	2003	2008	2013	2018	2019	2020
Route Kilometers	290,129	311,131	411,936	332,303	389,725	705,820
Passengers carried	4,556,000	5,617,000	4,449,000	5,203,000	5,290,000	2,541,000
Operating Revenue (Billion PKR)	47.952	88.863	95.771	103.490	147.500	94.989
Operating Expenses (Billion PKR)	42.574	120.499	123.151	150.524	165.324	100.619
Profit+/-Loss after Tax (Billion PKR)	+1.298	-36.138	-44.322	-67.328	-50.602	-34.643

Railway Linkage

Pakistan Railways (PR) is a major mode of transport in the public sector, contributing to the country's economic growth and providing national integration. Pakistan Railways comprises a total of 466 locomotives (461 Diesel Engine and 05 Steam Engines) for the 7,791 km route length.

Pakistan Railway Year Books

Indicators	2016	2017	2018	2019	2020
Route Kilometers	7,791	7,791	7,791	7,791	7,791
Passengers carried	52,192,000	52,388,000	54,907,000	60,387,000	44,304,000
Operating Revenue (Billion PKR)	36.582	40.065	49.570	54.508	47.584
Operating Expenses (Billion PKR)	41.858	50.072	52.071	53.772	59.288
Net Loss (Billion PKR)	26.532	40.303	36.049	32.124	49.477

Road Linkage

The National Highway Authority (NHA) was created, in 1991, through an Act of the Parliament, for planning, development, operation, repair and maintenance of National Highways and Strategic Roads specially entrusted to NHA by the Federal Government or by a Provincial Government or other authority concerned. NHA is custodian of 39 national highways/ motorways/ expressway/ strategic routes having a total length of 12,131 km. It is 4.6% of total national roads network i.e. 263,775 km, however, it carries 80% of commercial traffic and N-5 which is blood-line of Pakistan, carries 65% of this load in the country.

Maritime Linkage

Pakistan National Shipping Corporation (PNSC) is a National flag carrier. It came into existence by a merger of National Shipping Corporation (NSC) and Pakistan Shipping Corporation in 1979. PNSC has worldwide operations in the Dry Bulk segment of shipping market since incorporation and is involved in transportation of liquid cargo since 1998 locally and internationally. The corporation's head office is located in Karachi. At present, PNSC fleet comprises 11 vessels of various types/sizes (05 Bulk carriers,04 Aframax tankers and 02 LR-1 Clean Product tankers) with a total deadweight capacity (cargo carrying capacity) of 831,711 metric tons, the highest ever carrying capacity since inception of PNSC.

Finance

Main articles: Banking in Pakistan and Insurance in Pakistan

Pakistan has a large and diverse banking system. In 1974, a nationalization program led to the creation of six government-owned banks. A privatization program in the 1990s led to the entry of foreign-owned and local banks into the industry. As of 2010, there were five public-owned commercial banks in Pakistan, as well as 25 domestic private banks, six multi-national banks and four specialized banks.

Since 2000 Pakistani banks have begun aggressive marketing of consumer finance to the emerging middle class, allowing for a consumption boom (more than a 7-month waiting list for certain car models) as well as a construction bonanza. Pakistan's banking sector remained remarkably strong and resilient during the world financial crisis in 2008–09, a feature which has served to attract a substantial amount of FDI in the sector. Stress tests conducted in June 2008 data indicate that the large banks are relatively robust, with the medium and small-sized banks positioning themselves in niche markets.

The Pakistan Bureau of Statistics provisionally valued this sector at Rs.807,807 million in 2012 thus registering over 510% growth since 2000.

An article published in Journal of the Asia Pacific Economy by Mete Feridun of University of Greenwich in London with his Pakistani colleague Abdul Jalil presents strong econometric evidence that financial development fosters economic growth in Pakistan.

Financial Statements of Major Banks 2020 (Billion PKR)

Bank	Total assets	Revenue	Net income
STATE BANK OF PAKISTAN	12,273.044	1,233.260	1,163.433
HABIB BANK LTD.	3,643.712	147.795	31.524
NATIONAL BANK OF PAKISTAN	3,008.527	140.232	30.559
UNITED BANK LTD.	2,049.583	92.053	20.899
MCB BANK LTD.	1,757.462	89.470	29.037
ALLIED BANK LTD.	1,590.458	60.963	18.029
BANK AL-HABIB LTD.	1,522.091	67.893	17.812
MEEZAN BANK LTD.	1,521.559	74.921	22.166
BANK ALFALAH LTD.	1,384.874	57.500	10.475
THE BANK OF PUNJAB	1,095.446	36.371	6.944
HABIB METROPOLITAN BANK LTD.	1,017.572	38.413	12.008

In recent years, banking through digital channels has been gaining popularity in the country. These channels offer alternatives resulting in faster delivery of financial services to a wide range of customers. Significant progress has been observed in the usage of Internet Banking and Mobile Banking channels during the last few years, which is evident from the fact that in the last 5 year, the internet banking transactions have seen compound annualized growth of 31%, whereas mobile banking transactions have grown by 86% during the said period.. New regulations such as regulations for Electronic Money Institutions (EMIs), Security of Digital Payments, Payment Card Security Regulations, Internet Banking Security Regulations, and Guidelines for White Labels ATMs have been issued by SBP in recent years. These steps have been taken with the motivation to bring in innovation in Payments systems with an adequate balance of security and providing a level playing field to all the stakeholders.

Payment System Statistics

	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021		FY 2017	FY 2018	FY 2019	FY 2020	FY 2021
Total Transactions						Number of Banks	45	45	45	44	44
Transactions (Millions)	1,078.5	1,224.4	1,337.6	1,331.1	1,583.1	Bank branches	14,293	14,970	15,598	16,067	16,308
Amount (Billion PKR)	456,116.9	558,814.0	602,843.4	591,474.1	682,671.6	Total Number of ATMs	12,689	14,019	14,722	15,612	16,355
PRISM System Transactions						Internet Banking Users	2,347,026	3,113,728	3,278,611	3,983,235	5,239,301
Transactions (Millions)	1.1	1.7	2.5	2.6	4.2	Mobile Phone Banking Users	2,484,044	3,385,889	5,626,137	8,451,997	10,872,844
Amount (Billion PKR)	279,464.4	361,048.2	398,168.9	394,293.0	444,574.2	Call Centers Banking Users	22,389,113	26,484,765	29,748,743	32,322,973	33,436,122
E-Banking Financial Transactions						Online Branches	14,150	14,850	15,481	15,922	16,170
Transactions (Millions)	625.6	756.2	869.8	905.9	1,183.1	POS Machines	54,490	53,511	56,911	49,067	71,907
Amount (Billion PKR)	37,061.9	47,403.7	58,820.7	65,987.3	86,482.3	No. of Banks' Accounts	46,491,242	50,565,334	53,923,303	54,731,001	62,005,178
Paper Based Transactions						Credit Cards	1,292,136	1,453,867	1,589,120	1,655,030	1,720,949
Transactions (Millions)	451.8	466.5	465.3	424.6	395.8	Debit Cards	17,857,561	21,712,069	24,831,777	26,698,046	29,849,278
Amount (Billion PKR)	139,590.6	150,362.1	145,853.9	131,193.8	151,615.1	ATMs only Cards	8,043,044	8,586,819	8,485,391	6,943,385	5,771,429

Housing

Main article: Housing in Pakistan

The property sector has expanded twenty-threefold since 2001, particularly in metropolises like Lahore. Nevertheless, the Karachi Chamber of Commerce and Industry estimated in late 2006 that the overall production of housing units in Pakistan has to be increased to 0.5 million units annually to address 6.1 million backlog of housing in Pakistan for meeting the housing shortfall in next 20 years. The report noted that the present housing stock is also rapidly aging and an estimate suggests that more than 50% of stock is over 50 years old. It is also estimated that 50% of the urban population now lives in slums and squatter settlements. The report said that meeting the backlog in housing, besides replacement of out-lived housing units, is beyond the financial resources of the government. This necessitates putting in place a framework to facilitate financing in the formal private sector and mobilise non-government resources for a market-based housing finance system. To promote affordable housing and home ownership among low to middle-income group, who currently do not own a house, SBP in 2020 has introduced Government's Mark-Up Subsidy Scheme through which subsidized financing is provided to individuals for construction or purchase of a new house. Since then huge demand for house financing has been witnessed by the commercial banks.

Outstanding Loans of Consumer Financing for House Building (Billion PKR)

Jun 2006	Jun 2010	Jun 2015	Jun 2016	Jun 2017	Jun 2018	Jun 2019	Jun 2020	Jun 2021	Dec 2021
43.205	54.500	40.207	48.153	60.688	82.939	92.561	79.803	103.631	143.802

Energy

Main article: Electricity sector in Pakistan

Central Power Purchasing Agency-Guarantee (CPPA-G) purchases electricity from power producers and the National Transmission and Despatch Company (NTDC) transmits this electricity via its transmission lines to Distribution Companies (DISCOs) which then distribute this electricity via their distribution lines to end consumers. For decades, the matter of balancing Pakistan's supply against the demand for electricity has remained a largely unresolved matter. Since 2018, the availability of electricity has improved with the substantial induction of generation capacity, but the cost of electricity has increased due to many factors like circular debt, fuel cost, currency devaluation, low recovery and Transmission and Distribution losses. Pakistan faces a significant challenge in revamping its network responsible for the supply of electricity. Most cities in Pakistan receive substantial sunlight throughout the year, which would suggest good conditions for investment in solar energy.

NEPRA Reports

indicator	2010	2013	2016	2017	2018	2019	2020	2021
Installed Capacity (MW)	22,064	23,725	25,421	28,712	35,979	38,995	38,719	39,772
Max Generation Capability (MW)	12,751	14,600	17,261	19,020	23,766	24,565	27,780	27,819
Peak hours demand (MW)	18,467	18,827	22.559	25,117	26,741	25,627	26,252	28,253
+Surplus/-Deficit (MW)	-5,716	-4,227	-5,298	-6,097	-2,975	-1,062	+1,528	-434
Electricity Generation (GWh)	100,020	98,655	114,093	120,622	133,588	137,005	134,242	143,589
Electricity Consumption (GWh)	78,768	81,389	94,354	99,616	110,891	113,142	112,071	121,206
Transmission losses (%)	3.15	3.05	2.57	2.31	2.43	2.83	2.76	2.78
Distribution losses (%)	18.37	18.59	18.14	17.93	18.32	17.61	18.86	17.95
(%) share in Electricity Generation
Hydel	28.56	30.44	30.29	26.59	21.01	24.16	28.83	27.02
Thermal	68.50	64.91	64.57	65.34	68.87	65.25	60.21	61.76
Nuclear	2.67	4.24	3.70	5.20	6.78	6.67	7.37	7.72
Renewable Energy	0.01	0.03	1.04	2.45	2.92	3.57	3.21	3.15

Main sources of Pakistan primary energy supplies include Gas, Oil, Coal, imported LNG and Hydro electricity with the share of 33.1%, 22.6%, 18.3%, 10.3% and 9.9% respectively in 2020. Since the coal mining in Thar desert and the LNG imports from Qatar, Coal and imported LNG have increased their shares manyfold in just 5 years in primary energy supplies of country. The share of Gas is decreasing from 50% in 2005 to 33% in 2020 and oil since 2015 from 35% to 23% in 2020 and are replacing largely by Coal and LNG. As Pakistan intends to generate around 8,800 megawatts of nuclear power by 2030 and 40,000 megawatts by 2050, it's share is also increasing gradually.

Primary Energy Supplies by Source

Fiscal Year	Unit	Gas	Oil	Coal	LNG Import	Hydro Electricity	Nuclear Electricity	LPG	Renewable Electricity	Imported Electricity	Total
2005	MTOE	27.95	16.33	4.23	-	6.13	0.67	0.25	-	0.03	55.59
	%Share	50.3	29.4	7.6	-	11.0	1.2	0.5	-	0.0	100
2010	MTOE	30.81	19.81	4.62	-	6.71	0.69	0.40	-	0.06	63.09
	%Share	48.8	31.4	7.3	-	10.6	1.1	0.6	-	0.1	100
2015	MTOE	29.98	24.97	4.95	0.47	7.75	1.38	0.46	0.19	0.11	70.26
	%Share	42.7	35.5	7.0	0.7	11.0	2.0	0.7	0.3	0.1	100
2020	MTOE	26.66	18.19	14.71	8.32	8.02	2.58	1.03	0.99	0.12	80.62
	%Share	33.1	22.6	18.3	10.3	9.9	3.2	1.3	1.2	0.2	100

Foreign trade, remittances, aid, and investment

Investment

Foreign investment had significantly declined by 2010, dropping by 54.6% due to Pakistan's political instability and weak law and order, according to the Bank of Pakistan.

Business regulations have been overhauled along liberal lines, especially since 1999. Most barriers to the flow of capital and international direct investment have been removed. Foreign investors do not face any restrictions on the inflow of capital, and investment of up to 100% of equity participation is allowed in most sectors. Unlimited remittance of profits, dividends, service fees or capital is now the rule. However, doing business has been becoming increasingly difficult over the past decade due to political instability, rising domestic insurgency and insecurity and vehement corruption. This can be confirmed by the World Bank's Ease of Doing Business Index report degrading its ratings for Pakistan each year since September 2009.

Tariffs have been reduced to an average rate of 16%, with a maximum of 25% (except for the car industry). The privatization process, which started in the early 1990s, has gained momentum, with most of the banking system privately owned, and the oil sector targeted to be the next big privatization operation.

Data is from SBP.

Amounts are in million US$

List	FY 2006	FY 2007	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021
Foreign Direct Investment	3521.0	5139.6	5410.2	3719.9	2150.8	1634.8	820.6	1456.5	1698.6	1033.8	2392.9	2406.6	2780.3	1362.4	2,561.2	1,847.4
Foreign Public Investment	612.5	1,468.3	20.8	-544.1	-652.4	-20.1	-52.8	4.6	2,115.2	927.1	-8.8	262.1	2,450.5	-1,002.0	-241.3	2,555.3

Foreign acquisitions and mergers

With the rapid growth in Pakistan's economy, foreign investors are taking a keen interest in the corporate sector of Pakistan. In recent years, majority stakes in many corporations have been acquired by multinational groups.

• PICIC by Singapore-based Temasek Holdings for $339 million
• Union Bank by Standard Chartered Bank for $487 million
• Prime Commercial Bank by ABN Amro for $228 million
• PakTel by China Mobile for $460 million
• PTCL by Etisalat for $1.8 billion
• Additional 57.6% shares of Lakson Tobacco Company acquired by Philip Morris International for $382 million
• In 2016, Arçelik acquired Dawlance for $243 million.
• In 2016, FrieslandCampina acquired 51% stake in Engro Foods for $446.81 million.
• In 2016, The Abraaj Group sold its 66.4% stake in K-Electric to Shanghai Electric for $1.77 billion.

The foreign exchange receipts from these sales are also helping cover the current account deficit.

Foreign trade

Main article: Foreign trade of Pakistan

A proportional representation of Pakistan exports, 2019

Pakistan witnessed the highest export of US$25.4 billion in the FY 2010–11. However, in subsequent years exports have declined considerably. This declined started from financial year 2014–15 when an international commodity slump set in. This was compounded by structural supply side constraints including energy shortages, high input costs and an overvalued exchange rate. From financial year 2014 to 2016, exports declined by 12.4 percent. Exports growth trend over this period was similar to the world trade growth patterns. Pakistan's external sector continued facing stress during 2016–17. But still Pakistan's merchandise trade exports grew by 0.1 percent during the fiscal year 2016–17. The imports continued to grow at a much faster rate and grew by a large percentage of 18.0 during the FY 2017 as compared to the previous year. World imports had been stagnant between 2011 and 2014 but registered significant drop since early 2015 because of weak commodity and product prices and weak global economic activity. Economic growth was lacklustre in the OECD countries which contributed to the slowdown in China. Furthermore, the ratio between real growth in world imports and world real GDP growth substantially declined. This decline in the import content of economic activity triggered a shift in consumption worldwide from traded towards non-traded goods, import substitution, a slowdown in the pace of trade liberalization, and gave currency to protectionist measures. A bulk of Pakistan's exports are directed to the OECD region and China. Historical data suggest strong correlation between Pakistani exports to imports in OECD and China. As per FY 2016 data, more than half of country's exports are shipped to these two destinations i.e. OECD and China. A decline in Pakistan overall exports, thus occurred in this backdrop.

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.

Amounts in billion US dollars

List	FY 2006	FY 2007	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021
Total Exports	20.312	21.408	24.012	23.213	24.893	31.114	29.731	31.526	30.423	29.962	27.428	27.918	30.619	30.223	27.973	31.512
Exports (Goods)	16.572	17.301	20.448	19.126	19.680	25.369	24.718	24.802	25.078	24.090	21.972	22.003	24.768	24.257	22.536	25.630
Exports(Services)	3.740	4.107	3.564	4.087	5.213	5.745	5.013	6.724	5.345	5.872	5.456	5.915	5.851	5.966	5.437	5.882
Total Imports	33.183	35.289	45.439	39.220	38.119	43.570	48.688	48.445	49.663	50.205	50.120	58.577	67.948	62.805	52.398	61.658
Imports (Goods)	24.893	26.873	35.282	31.665	31.132	35.796	40.370	40.157	41.668	41.357	41.118	48.001	55.671	51.869	43.645	53.818
Imports (Services)	8.290	8.416	10.157	7.555	6.987	7.774	8.318	8.288	7.995	8.848	9.002	10.576	12.277	10.936	8.753	7.840
Trade deficit (Goods)	8.441	9.711	14.970	12.627	11.452	10.427	15.652	15.355	16.590	17.267	19.146	25.998	30.903	27.612	21.109	28.188
Trade deficit as (%) of GDP	6.5	6.2	8.8	7.5	6.5	4.9	7.0	6.6	6.8	6.4	6.1	7.7	8.7	8.6	7.0	8.1

Pakistan's imports are showing rising trend at a relatively faster rate due to the increased economic activity as part of China Pakistan Economic Corridor (CPEC), particularly in the Energy sector. The construction projects under CPEC require heavy machinery that has to be imported. It is also observed that the economy is currently being led both by investments as well as consumption, resulting in relatively higher levels of imports. During FY 2018 Pakistan's exports picked up and reached to US$24.8 billion showing a growth of 12.6 percent over previous year FY 2017. Imports on the other hand also increased by 16.2 percent and touched the highest figure of US$56.6 billion. As a result, the trade deficit widened to US$31.8 billion which was the highest since last ten years. Pakistan's exports of goods recorded their highest level of $25.6 billion during the fiscal year 2020–21, higher than the $25.3 billion recorded in 2010–11.

Exports

Pakistan's major export commodities for the last five fiscal years are listed in the table below.

Amounts are in Million US$

Commodities	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021
Cotton cloth	2,123.0	2,175.9	2,174.3	1,941.7	1,884.0
Knitwear	2,334.6	2,615.1	2,854.2	2,688.4	3,371.7
Ready-made garments	2,279.4	2,477.1	2,568.3	2,595.2	2,818.6
Bed wear	2,156.8	2,346.0	2,347.2	2,230.0	2,688.2
Rice	1,574.9	1,933.1	2,162.8	2,273.9	2,208.5
Cotton yarn	1,140.2	1,248.9	1,201.6	1,080.8	921.7
Chemical and pharmaceutical products	1,113.3	1,389.6	1,227.1	1,074.2	1,145.6
Towels	678.7	750.1	712.9	680.1	881.5
Sports goods	551.5	551.4	518.9	458.3	470.3
Leather manufactures	486.7	614.9	503.2	479.6	559.0
Surgical goods & medical instruments	396.3	441.7	437.8	411.1	479.0

Imports

Pakistan's major import commodities for the last five fiscal years are listed in the table below.

Amounts are in Million US$

Commodities	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021
Petroleum products	6,379.9	6,768.3	6,038.7	4,189.5	4,640.6
Petroleum crude	2,764.6	4,310.2	4,914.9	2,606.2	3,189.9
Iron and steel	1980.1	2,523.3	2,008.4	1,491.0	2,196.9
Plastic material	1,875.1	2,311.9	2,273.3	1,941.4	2,459.4
Electrical machinery & apparatus	1,317.2	1,800.6	1,286.7	1,134.7	1,457.2
Textile Machinery	652.3	614.6	654.0	587.7	855.5
Palm oil	1,775.1	1,908.3	1,661.9	1,751.6	2,442.3
Power generating machinery	1,336.6	1,576.6	731.7	734.4	930.2
Road vehicles	1,774.1	2,182.4	1,934.4	1,276.1	2,142.3
Telecom	1,023.0	1,396.8	1,172.4	1,637.4	2,512.8
Liquefied natural gas	1,270.7	2,035.5	2,871.9	2,374.7	1,776.1
Raw cotton	909.3	1,197.5	1,180.6	1,341.9	1,892.1

External imbalances

See also: Pakistan and the International Monetary Fund

During FY 2017, the increase in imports of capital equipment and fuel significantly put pressure on the external account. A reversal in global oil prices led to increase in POL imports, accompanied by falling exports, as a result the merchandised trade deficit grew by 39.4 percent to US$26.885 billion in FY 2017. While remittances and Coalition Support Fund inflows both declined slightly over the same period last year, however, the impact was offset by an improvement in the income account, mainly due to lower profit repatriations by oil and gas firms.

'The current account deficit increased to US$19.2 billion in FY 2018.

However, the impact of high current deficit on foreign exchange reserves was not severe, as financial inflows were available to the country to partially offset the gap; these inflows helped ensure stability in the exchange rate. Net FDI grew by 12.4 percent and reached US$1.6 billion in the nine-months period, whereas net FPI saw an inflow of US$631 million, against an outflow of US$393 million last year. Encouragingly for the country, the period saw the completion of multiple merger and acquisition deals between local and foreign companies. Moreover, multiple foreign automakers announced their intention to enter the Pakistani market, and some also entered into joint ventures with local conglomerates. This indicates that Pakistan is clearly on foreign investors' radar, and provides a positive outlook for FDI inflows going forward. government's successful issuance of a US$1.0 billion Sukuk in the international capital market, at an extremely low rate of 5.5 percent. Besides, Pakistan continued to enjoy support from international financial institutions (IFIs) like the World Bank and Asian Development Bank, and from bilateral partners like China, in the post-EFF period: net official loan inflows of US$1.1 billion were recorded during the period. As a result, the country's FX reserve amounted to US$20.8 billion by 4 May 2017 sufficient to finance around four month of import payments.

Amounts in million US dollars

List	FY 2004	FY 2005	FY 2006	FY 2007	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021
Credit	22,003	27,006	31,761	33,016	37,247	35,357	38,135	47,703	48,243	50,197	51,153	52,897	51,242	52,218	55,145	55,791	54,254	65,227
Debit	20,192	28,540	36,751	39,894	51,121	44,617	42,081	47,489	52,901	52,693	54,283	55,712	56,203	64,488	74,340	69,225	58,703	67,143
Net	1,811	-1,534	-4,990	-6,878	-13,874	-9,261	-3,946	214	-4,658	-2,496	-3,130	-2,815	-4,961	-12,270	-19,195	-13,434	-4,449	-1,916
As % of GDP
Net	+1.7	-1.3	-3.7	-4.5	-8.9	-5.7	-2.3	+0.1	-2.1	-1.1	-1.3	-1.0	-1.7	-4.0	-6.1	-4.8	-1.7	-0.6

Economic aid

Main article: Foreign aid to Pakistan

Pakistan receives economic aid from several sources as loans and grants. The International Monetary Fund (IMF), World Bank (WB), Asian Development Bank (ADB), etc. provide long-term loans to Pakistan. Pakistan also receives bilateral aid from developed and oil-rich countries. Foreign aid has been one of the main sources of money for the Pakistani economy. Collection of foreign aid has been one of the priorities of almost every Pakistani Government with the Prime Minister himself leading delegations on a regular basis to collect foreign aid.

The Asian Development Bank will provide close to $6 billion development assistance to Pakistan during 2006–9. The World Bank unveiled a lending programme of up to $6.5 billion for Pakistan under a new four-year, 2006–2009, aid strategy showing a significant increase in funding aimed largely at beefing up the country's infrastructure. Japan will provide $500 million annual economic aid to Pakistan. In November 2008, the International Monetary Fund (IMF) has approved a loan of 7.6 billion to Pakistan, to help stabilise and rebuild the country's economy. Between the 2008 and 2010 fiscal years, the IMF extended loans to Pakistan totalling 5.2 billion dollars. The government decided in 2011 to cut off ties with the IMF. However the government newly elected in 2013 re-established these ties, and a negotiated a three-year $6.6 billion package which would allow it to deal with on-going debt issues. In May 2019, Pakistan finalised a US$6 billion foreign aid with IMF. This is Pakistan's 22nd such bailout from the IMF.

The China–Pakistan Economic Corridor is being developed with a contribution of mainly concessionary loans from China under the Belt and Road Initiative. Much like BRI, value of CPEC investments transcends any fiat currency and is only estimated vaguely as it spans over decades of past and future industrial development and global economic influence.

Remittances

The remittances of Pakistanis living abroad has played important role in Pakistan's economy and foreign exchange reserves. The Pakistanis settled in Western Europe and North America are important sources of remittances to Pakistan. Since 1973 the Pakistani workers in the oil rich Arab states have been sources of billions of dollars of remittances.

The 9 million-strong Pakistani diaspora, contributed US$19.3 billion to the economy in FY2017. The major source countries of remittances to Pakistan include UAE, US, Saudi Arabia, GCC countries (including Bahrain, Kuwait, Qatar and Oman), Australia, Canada, Japan, Norway, Switzerland, UK and EU countries.

Remittances sent home by overseas Pakistani workers have seen a negative growth of 3.0% in the fiscal year 2017 compare to previous year when remittances reached at all-time high of 19.9 billion US dollars. This decline in remittances is mainly due to the adverse economic conditions of Arabian and gulf countries after the fall in oil prices in 2016. However, the recent development activities in the Qatar FIFA World Cup, Dubai Expo, Saudi Arabia's implementation of its Vision 2030 and particularly the recent visit of the P.M to Kuwait should all be helpful in opening new avenues for employment in these countries. Going forward one can expect improvements in the coming years. The SBP's data showed that remittances amounted to $29.4 billion for the year 2021. The government and SBP took measures to incentivise the use of formal channels of sending money home. The orderly foreign exchange market conditions also contributed to the rise in the remittances. Remittances helped improve the country's external sector position despite the challenging global economic conditions due to corona virus pandemic.

Data is taken from SBP and Ministry of Finance.

Amounts are in billion US$

List	FY 2006	FY 2007	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021
Workers' remittances	4.6	5.4	6.4	7.8	8.9	11.2	13.1	13.9	15.8	18.7	19.9	19.4	19.9	21.7	23.1	29.4

Remittances sent home by overseas Pakistanis in the fiscal year 2020/21 are as under:

Country	(Billion US$)
Saudi Arabia	7.667
UAE	6.114
UK	4.067
Gulf Cooperation Council	3.310
USA	2.754
European Union	2.709
Australia	0.594
Canada	0.586
Malaysia	0.204
Norway	0.111
Japan	0.085
Switzerland	0.041
Other countries	1.130

Economic issues

Corruption

Main article: Corruption in Pakistan

Corruption Perceptions Index for Pakistan compared to other countries, 2020

The corruption is on-going issue in the government, claiming to take initiatives against it, particularly in the government and lower levels of police forces. In 2011, the country has had a consistently poor ranking at the Transparency International's Corruption Perceptions Index with scores of 2.5, 2.3 in 2010, and 2.5 in 2009 out of 10. In 2011, Pakistan ranked 134 on the index with 42 countries ranking worse. In 2012, Pakistan's ranking dropped even further from 134 to 139, making Pakistan the 34th most corrupt country in the world, tied with Azerbaijan, Kenya, Nepal, and Nigeria. However, during Sharif regime (2013–17), Pakistan got improved ranking of 117/180 in 2017 (with an improvement in score 28, 29, 30, 32, 32 [2013–17]), equal to Egypt (better than 59 countries). Due to bad effects of corruption on country, National Accountability Bureau (NAB) was established in 1999. The basic purpose of NAB was to recover looted money from corrupt elements and deposit in the national exchequer. NAB during 2018 to 2020 has recovered Rs 502 billion from corrupt elements which is a record achievement. NAB has recovered Rs 814 billion directly or indirectly from corrupt elements since the bureau's inception, which is more recovery as compared to other such anti corruption organizations.

Debt

Main articles: National debt of Pakistan, Foreign aid to Pakistan, and Periods of stagflation in Pakistan

Map of countries by external debt in US$, 2006

As per the CIA World Factbook, in 2017, Pakistan ranked 57th in the world, with respect to the public external debt to various international monetary authorities (owing ~$107.527 billion in 2019), with a total of 67.1% of GDP (in 2017).

Government debt and liabilities:

• Total debt & liabilities = Gross Public Debt + External Liabilities + Private Sector External Debt + PSEs External Debt + PSEs Domestic Debt + Commodity Operations + Intercompany External Debt from Direct Investor abroad
• Gross Public Debt = Government (Federal+Provincial) Domestic Debt + Government (Federal+Provincial) External Debt + Debt from IMF
• Total Debt of Government / Net Public Debt = Gross Public Debt – Government Deposits in the Banking System.
• Public External Debt = Government External Debt + Debt from IMF (Foreign Exchange Liabilities are not included)
• Total External Debt = Public External Debt + Public Sector Enterprises + Banks + Private Sector + Debt Liabilities to Direct Investors

Data is taken from the State Bank of Pakistan.

List	Jun 2009	Jun 2010	Jun 2011	Jun 2012	Jun 2013	Jun 2014	Jun 2015	Jun 2016	Jun 2017	Jun 2018	Jun 2019	Jun 2020	Jun 2021	Dec 2021
(Amounts are in Billion PKR)
Total debt & liabilities	8,745.6	10,704.4	12,532.2	14,553.1	16,338.2	18,214.3	19,849.4	22,577.1	25,114.2	29,879.4	40,223.1	44,591.5	47,830.9	51,724.2
Gross public debt	7,731.1	9,010.4	10,770.8	12,696.7	14,291.7	15,991.3	17,380.2	19,676.6	21,408.7	24,952.9	32,707.9	36,398.6	39,860.7	42,745.3
Total debt of govt.	7,204.9	8,410.8	9,927.6	11,890.2	13,457.3	14,623.9	15,986.0	17,823.2	19,635.4	23,024.0	29,520.7	33,235.3	35,753.2	38,377.0
(Amounts are in Billion US$)
Public external debt	46.4	49.8	55.3	53.5	48.1	51.3	50.9	57.7	62.5	70.2	73.4	77.3	85.6	90.0
Total external debt	52.3	61.6	66.3	65.5	60.9	65.3	65.2	73.9	83.5	95.2	106.3	113.0	122.2	130.6
As % of GDP
Total debt & liabilities	66.3	72.0	68.6	72.6	73.0	72.4	72.3	69.0	70.6	76.2	91.8	93.8	86.2
Gross public debt	58.6	60.6	58.9	63.3	63.9	63.5	63.3	60.1	60.2	63.7	74.7	76.6	71.8
Total debt of govt.	54.6	56.6	54.3	59.3	60.1	58.1	58.3	54.5	55.2	58.7	67.4	69.9	64.3
Public external debt	28.6	28.7	26.0	25.2	21.4	20.2	18.9	19.6	19.5	23.4	31.2	31.1	27.0

Pakistan external debt servicing (principal + interest)

Amounts are in million US$

List	FY 2006	FY 2007	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021
Principal	1,718	1,593	1,867	2,837	3,140	2,458	3,294	5,046	5,659	3,499	3,076	4,439	3,326	6,527	9,630	10,181
Interest	906	1,091	1,248	1,159	1,015	1,074	1,019	933	909	1,172	1,346	1,626	2,317	2,951	3,229	2,237
Total	2,624	2,684	3,115	3,996	4,155	3,532	4,313	5,979	6,568	4,671	4,422	6,065	5,642	9,478	12,859	12,418

See also

• Economy of Azad Kashmir
• Economy of Balochistan, Pakistan
• Economy of Gilgit Baltistan
• Economy of Khyber Pakhtunkhwa
• Economy of Punjab, Pakistan
• Economy of Sindh
• Economy of Karachi
• Economy of Islamabad
• Economy of Lahore
• Economy of Faisalabad
• Economy of Rawalpindi

Further reading

• Gabol, Nasir (1990). Privatisation in Pakistan. Paris, France: Organisation for Economic Cooperation and Development. ISBN 92-64-15310-1.
• Ahmad, Viqar and Rashid Amjad. 1986. The Management of Pakistan's Economy, 1947–82. Karachi: Oxford University Press.
• Ali, Imran. 1997. ‘Telecommunications Development in Pakistan’, in E.M. Noam (ed.), Telecommunications in Western Asia and the Middle East. New York: Oxford University Press.
• Ali, Imran. 2001a. ‘The Historical Lineages of Poverty and Exclusion in Pakistan’. Paper presented at Conference on Realm, Society and Nation in South Asia. National University of Singapore.
• Ali, Imran. 2001b. ‘Business and Power in Pakistan’, in A.M. Weiss and S.Z. Gilani (eds), Power and Civil Society in Pakistan. Karachi: Oxford University Press.
• Ali, Imran. 2002. ‘Past and Present: The Making of the State in Pakistan’, in Imran Ali, S. Mumtaz and J.L. Racine (eds), Pakistan: The Contours of State and Society. Karachi: Oxford University Press.
• Ali, Imran, A. Hussain. 2002. Pakistan National Human Development Report. Islamabad: UNDP.
• Ali, Imran, S. Mumtaz and J.L. Racine (eds). 2002. Pakistan: The Contours of State and Society. Karachi: Oxford University Press.
• Amjad, Rashid. 1982. Private Industrial Investment in Pakistan, 1960–70. London: Cambridge University Press.
• Andrus, J.R. and A.F. Mohammed. 1958. The Economy of Pakistan. Stanford: Stanford University Press.
• Bahl, R., & Cyan, M. (2009). Local Government Taxation in Pakistan (No. paper0909). International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
• Barrier, N.G. 1966. The Punjab Alienation of Land Bill of 1900. Durham, NC: Duke University South Asia Series.
• Jahan, Rounaq. 1972. Pakistan: Failure in National Integration. New York: Columbia University Press.
• Kessinger, T.G. 1974. Vilyatpur, 1848–1968. Berkeley and Los Angeles: University of California Press.
• Kochanek, S.A. 1983. Interest Groups and Development: Business and Politics in Pakistan. New Delhi: Oxford University Press.
• LaPorte, Jr, Robert and M.B. Ahmad. 1989. Public Enterprises in Pakistan. Boulder, Colorado: Westview Press.
• Latif, S.M. 1892. Lahore. Lahore: New Imperial Press, reprinted 1981, Lahore: Sandhu Printers.
• Low, D.A. (ed.). 1991. The Political Inheritance of Pakistan. London: Macmillan.
• Noman, Omar. 1988. The Political Economy of Pakistan. London: KPI.
• Papanek, G.F. 1967. Pakistan's Development: Social Goals and Private Incentives. Cambridge, Massachusetts: Harvard University Press.
• Raychaudhuri, Tapan and Irfan Habib (eds). 1982. The Cambridge Economic History of India, 2 vols. Cambridge: Cambridge University Press
• White, L.J. 1974. Industrial Concentration and Economic Power. Princeton, N.J.: Princeton University Press.
• Ziring, Lawrence. 1980. Pakistan: The Enigma of Political Development. Boulder, Colorado: Folkestone.
• Ali, Imran. 1987. ‘Malign Growth? Agricultural Colonisation and the Roots of Backwardness in the Punjab’, Past and Present, 114
• Ali, Imran. August 2002. ‘The Historical Lineages of Poverty and Exclusion in Pakistan’, South Asia, XXV(2).
• Ali, Imran and S. Mumtaz. 2002. ‘Understanding Pakistan—The Impact of Global, Regional, National and Local Interactions’, in Imran Ali, S. Mumtaz and J.L. Racine (eds), Pakistan: the Contours of State and Society. Karachi: Oxford University Press.
• Hasan, Parvez. 1998. Pakistan's Economy at the Crossroads: Past Policies and Present Imperatives. Karachi: Oxford University Press.
• Hussain, Ishrat. 1999. Pakistan: The Economy of an Elitist State. Karachi: Oxford University Press.
• Khan, Shahrukh Rafi. 1999. Fifty Years of Pakistan's Economy: Traditional Topics and Contemporary Concerns. Karachi: Oxford University Press.
• Kibria, Ghulam. 1999. Shattered Dream: Understanding Pakistan's Development. Karachi: Oxford University Press.
• Kukreja, Veena. 2003. Contemporary Pakistan: Political Processes, Conflicts and Crises. New Delhi: Sage Publications.
• Zaidi, S. Akbar. 1999. Issues in Pakistan's Economy. Karachi: Oxford University Press
• Faheem, Khan. 2010. Issues in Pakistan's Economy. Peshawar:
• https://www.thenews.com.pk/tns/detail/710478-retail-sector-a-5-billion-tax-potential:

External links

• Statistics Division, Government of Pakistan
• Ministry of Finance, Government of Pakistan
• Ministry of Commerce, Government of Pakistan
• World Bank Summary Trade Statistics Pakistan
• Pakistan. The World Factbook. Central Intelligence Agency.