Pakistan is in the world’s top 30 economies in terms of purchasing power parity(PPP).The economy of Pakistan is semi-industrialized in nature mainly comprising of industries such as textiles, agriculture, food processing and chemicals apart from other industries. The economy faced various internal and external challenges during the financial year 2012-13. Energy crisis, increasing circular debt, poor working of the public sector enterprises and rising extremism had put a burden on the budget of the economy.
The GDP growth rate stood at 3.6% for the financial year 2012-13. On an average, since 2005, the GDP has been growing at the rate of 5% per year. Since financial year 2008-09 the economy grew at a meager rate of 2.94%. The major sectors namely textiles, agriculture, manufacturing and services performed below average.
The contribution of agriculture income towards the economy was nominal during 2012-13. The growth of the agriculture industry was low at 3.3% as compared to the previous year 3.5% due to unfavorable climatic conditions which thereby hampered the produce of cotton and rice. There was a growth seen in the Manufacturing sector as it grew by 3.5% compared to 2.1% in the previous year. On the other hand, the Service Sector experienced a decline since it grew at 3.7% as compared to 5.3 percent in the last financial year. Agriculture and manufacturing are the two commodity producing sector and together they accounted for 42.3% of the GDP.
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Source: World Bank
Foreign Direct Investment was affected by the series of attacks in Karachi leading to massive protests. Investment saw a downfall from 19.21% in 2008 to 14.2% in 2012-13.However, from the mid of the year, Foreign Direct investment picked up reaching US$853.5 million. Portfolio Investments rose thus, backing Foreign Private Investment growth of 80.4% compared to the same time previous year. The United Kingdom, the United States and the UAE were the main contributors to the foreign direct inflows. The main sector attracting foreign inflows was Oil and Gas exploration encompassing 23.5% of foreign inflows followed by Financial Business with 18.1% share and Communication with 10.6% respectively.
However, inflation on the other hand showed decline with core inflation, wholesale price index and sensitive price index coming out in single digit. The Consumer Price Index followed the same trend coming at 7.5% as compared to 10.9% in the previous year. Inflation saw a downfall because of adequate supply in the domestic market and a reduction in the prices of the commodities in the international markets.
One of the key indicators of economic stability of a country is the country’s Per Capita Income. The per capita income grew at a nominal rate of 3.4% bringing it to $1368 in the year 2012-13. Investment to a large extent determines the economic growth of a country, however, over the last few years, it has been hit hard. Compared to the year 2007-08, the total investment declined from 19.21% of the GDP to 14.22% in 2012-13.Pakistan’s capital market experienced voluminous growth breaking all previous records to reach an all time high mark of 22,000.
|Last Updated on : 10th March 2015||Next Update : February 2016|