Economy of Pakistan
Karachi - A Sea Port and Business hub.jpg
Karachi the financial hub of Pakistan
CurrencyPakistani rupee (₨) (PKR)
1 July – 30 June
Trade organisations
ECO, SAFTA, WTO, AIIB, ADB, and others
Country group
Statistics
PopulationIncrease 227 million (5th; 2021 estimate)
GDP
GDP rank
GDP growth
  • 6.1% (17/18) 3.1% (18/19)
  • −1.0% (19/20F) 5.6% (20/21R)[6][7]
GDP per capita
  • Increase $1978 Est. (Nominal; 2021)[8]
  • Increase $7,465 Est. (PPP; 2021)[9]
GDP per capita rank
GDP by sector
  • Negative increase 13.0% YoY (Jan 2022)[11]
Negative increase 12.25% (Apr 2022)[12]
Population below poverty line
31.6 medium (2018, World Bank)[15]
Labour force
  • Labour Force 71.76 million

Employed 67.25 million Unemployed 4.51 million (2021)[18]

Labour force by occupation
Unemployment
  • Positive decrease 6.3% (2020-21)
  • Negative increase 6.9% (2018–19)[20]
Main industries
Increase 108th (medium, 2020)[21]
External
ExportsIncrease $25.630 billion (FY 2021)[22]
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[23]
Main export partners
ImportsNegative increase $53.785 billion (FY 2021)[22]
Import goods
Main import partners
FDI stock
Increase $34.798 billion (FY 2019)[26]
Decrease -12.099 billion US$ (FY 2022 Jul-Feb)[27]
$127.02 billion (September 2021)[28]
Public finances
Positive decrease 64.3% of GDP (Jun 2021)[29]
Positive decrease −6.1% of GDP (FY 2021)[30]
RevenuesDecrease 12.4% of GDP; 6,903 billion PKR or $43 billion (FY 2021)[30]
ExpensesPositive decrease 18.6% of GDP; 10,307 billion PKR $64 billion (FY 2021)[30]
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

The economy of Pakistan is the 20th-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 estimated nominal GDP of Pakistan stands at US$387 billion with a nominal GDP per capita of US$1,978 (172th worldwide); its Estimated GDP based on PPP stands at US$1.529 trillion with a GDP (PPP) per capita of US$7,465 (156th worldwide).[34]

Pakistan is a developing country[35][36][37] with a semi-industrial economy.[38][39][40] Primary export commodities include textiles, leather goods, sports equipment, chemicals, and carpets/rugs.[41][42]

The growth poles of Pakistan's economy are situated along the Indus River;[39][43] the diversified economies of Karachi and major urban centres in Punjab, co-existing with lesser developed areas in other parts of the country.[39] The Pakistani economy has suffered in the past from internal political turmoil, a rapidly growing population, and mixed levels of foreign investment.[44] 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.[45][46] 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.[47]

As of May 2021, the Pakistani government has predicted that future growth rates will be 5 percent—one of the highest in South Asia.[48] 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".[49]

In 2017, Pakistan's GDP (PPP) crossed US$1 trillion.[50] In 2021, the estimated GDP (PPP) stood at US$1.33 trillion.[51] 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.[citation needed]

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[52] 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.[53]

Economic resilience

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:

Macroeconomic reform and prospects

According to many sources, the Pakistani government has made substantial economic reforms since 2000,[55] 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."[56]

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.[57]

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.[58] 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.[59]

To boost Pakistan's unstable foreign-exchange reserves, Qatar announced to invest $3 billion the form of deposits and direct investments in the country.[60] By the end of June 2019, Qatar sent the first $500 million to Pakistan.[61][62]

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[63]
GDP at
current
prices[64]
(Billion PKR)
US$ to PKR
exchange
rates[64]
Nominal
GDP
(Billion
US$)
Per
capita
income
(US$)[64]
inflation
[65][66]
Govt.
debt
to
GDP %[67][68]
FY 1980 Increase 7.33% Increase 235.168 Steady 9.91 Increase 23.730 Increase 314 Negative increase 11.9% n/a
FY 1981 Increase 6.40% Increase 278.196 Steady 9.91 Increase 28.072 Increase 363 Negative increase 11.9% n/a
FY 1982 Increase 7.56% Increase 324.159 Steady 9.91 Increase 32.710 Increase 409 Negative increase 5.9% n/a
FY 1983 Increase 6.79% Increase 364.387 Negative increase 12.71 Decrease 28.669 Decrease 358 Negative increase 6.4% n/a
FY 1984 Increase 3.97% Increase 419.802 Negative increase 13.48 Increase 31.142 Increase 374 Negative increase 6.1% n/a
FY 1985 Increase 8.71% Increase 472.157 Negative increase 15.15 Increase 31.165 Decrease 360 Negative increase 5.6% n/a
FY 1986 Increase 6.36% Increase 514.532 Negative increase 16.14 Increase 31.879 Decrease 358 Increase 3.5% n/a
FY 1987 Increase 5.81% Increase 572.479 Negative increase 17.18 Increase 33.322 Steady 358 Increase 4.7% n/a
FY 1988 Increase 6.44% Increase 675.389 Negative increase 17.60 Increase 38.374 Increase 385 Negative increase 8.8% n/a
FY 1989 Increase 4.81% Increase 769.745 Negative increase 19.22 Increase 40.049 Increase 388 Negative increase 7.9% n/a
FY 1990 Increase 4.59% Increase 855.943 Negative increase 21.45 Decrease 39.904 Increase 390 Negative increase 9.1% n/a
FY 1991 Increase 5.42% Increase 1,016.724 Negative increase 22.42 Increase 45.349 Increase 424 Negative increase 12.6% n/a
FY 1992 Increase 7.57% Increase 1,205.204 Negative increase 24.84 Increase 48.519 Increase 437 Increase 4.8% n/a
FY 1993 Increase 2.10% Increase 1,332.841 Negative increase 25.96 Increase 51.342 Increase 450 Negative increase 9.8% n/a
FY 1994 Increase 4.37% Increase 1,561.104 Negative increase 30.16 Increase 51.761 Decrease 440 Negative increase 11.3% n/a
FY 1995 Increase 5.06% Increase 1,865.922 Negative increase 30.85 Increase 60.484 Increase 504 Negative increase 13.0% n/a
FY 1996 Increase 6.60% Increase 2,120.173 Negative increase 33.57 Increase 63.157 Increase 508 Negative increase 10.8% n/a
FY 1997 Increase 1.70% Increase 2,428.312 Negative increase 38.99 Decrease 62.280 Decrease 487 Negative increase 12.8% n/a
FY 1998 Increase 3.49% Increase 2,677.656 Negative increase 43.19 Decrease 61.997 Decrease 473 Negative increase 6.8% n/a
FY 1999 Increase 4.18% Increase 2,938.379 Negative increase 46.79 Increase 62.799 Decrease 468 Negative increase 5.7% n/a
FY 2000 Increase 3.91% Increase 4,243.393 Negative increase 51.77 Increase 81.966 Increase 589 Increase 3.6% n/a
FY 2001 Increase 3.65% Increase 4,627.582 Negative increase 58.44 Decrease 79.185 Decrease 558 Increase 4.4% Negative increase 78.3%
FY 2002 Increase 2.37% Increase 4,920.549 Negative increase 61.43 Increase 80.100 Increase 562 Increase 3.5% Positive decrease 72.7%
FY 2003 Increase 5.64% Increase 5,374.415 Positive decrease 58.50 Increase 91.870 Increase 644 Increase 3.1% Positive decrease 66.4%
FY 2004 Increase 7.70% Increase 6,203.725 Positive decrease 57.57 Increase 107.759 Increase 735 Increase 4.6% Positive decrease 59.6%
FY 2005 Increase 7.52% Increase 7,126.194 Negative increase 59.34 Increase 120.090 Increase 802 Negative increase 9.3% Positive decrease 54.4%
FY 2006 Increase 5.56% Increase 8,216.160 Negative increase 59.86 Increase 137.256 Increase 900 Negative increase 7.9% Positive decrease 48.7%
FY 2007 Increase 5.54% Increase 9,239.786 Negative increase 60.63 Increase 152.396 Increase 979 Negative increase 7.8% Positive decrease 47.0%
FY 2008 Increase 4.99% Increase 10,637.772 Negative increase 62.55 Increase 170.068 Increase1053 Negative increase 12.0% Negative increase 53.1%
FY 2009 Increase 0.36% Increase 13,199.707 Negative increase 78.50 Decrease 168.149 Decrease 1026 Negative increase 17.0% Negative increase 54.6%
FY 2010 Increase 2.58% Increase 14,866.996 Negative increase 83.80 Increase 177.410 Increase 1072 Negative increase 10.1% Negative increase 56.6%
FY 2011 Increase 3.62% Increase 18,276.440 Negative increase 85.50 Increase 213.759 Increase 1274 Negative increase 13.7% Positive decrease 54.3%
FY 2012 Increase 3.84% Increase 20,046.500 Negative increase 89.24 Increase 224.635 Increase 1320 Negative increase 11.0% Negative increase 59.3%
FY 2013 Increase 3.68% Increase 22,385.657 Negative increase 96.73 Increase 231.424 Increase 1334 Negative increase 7.4% Negative increase 60.1%
FY 2014 Increase 4.05% Increase 25,168.805 Negative increase 102.86 Increase 244.689 Increase 1389 Negative increase 8.6% Positive decrease 58.1%
FY 2015 Increase 4.06% Increase 27,443.022 Positive decrease 101.29 Increase 270.935 Increase 1514 Increase 4.5% Negative increase 58.3%
FY 2016 Increase 4.56% Increase 32,725.049 Negative increase 104.24 Increase 313.939 Increase 1640 Increase 2.9% Positive decrease 54.5%
FY 2017 Increase 4.61% Increase 35,552.819 Negative increase 104.70 Increase 339.568 Increase 1723 Increase 4.8% Negative increase 55.2%
FY 2018 Increase 6.10% Increase 39,189.810 Negative increase 109.84 Increase 356.789 Increase 1768 Increase 4.7% Negative increase 58.7%
FY 2019 Increase 3.12% Increase 43,798.401 Negative increase 136.09 Decrease 321.834 Decrease 1578 Negative increase 6.8% Negative increase 67.4%
FY 2020 Decrease -1.00% Increase 47,521.525 Negative increase 158.03 Decrease 300.712 Decrease 1457 Negative increase 10.7% Negative increase 69.9%
FY 2021 Increase 5.57% Increase 55,488.010 Negative increase 160.02 Increase 346.756 Increase 1666 Negative increase 8.9% Positive decrease 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".[69][citation needed] The stock market capitalisation of listed companies in Pakistan was valued at $5,937 million in 2005 by the World Bank.[70] 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.[71] 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.[72] 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.[73] 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.[74] 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.[75] 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.[76]

PSX 100 index growth rate[65]

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 % Increase 34.1 Increase 37.9 Decrease -10.8 Decrease -41.7 Increase 35.7 Increase 28.5 Increase 10.4 Increase 52.2 Increase 41.2 Increase 16.0 Increase 9.8 Increase 23.2 Decrease-10.0 Decrease-20.5 Increase 1.5 Increase 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.[77] Official figures also show that the proportion of households that own a motorcycle and washing machines has grown impressively over the past 15 years.[78] 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.[77]

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.[79] 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.[80] Significant progress in taxation and business reforms has ensured that many firms now are not compelled to operate in the underground economy.[81]

"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".[82] 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.[83]

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.[84] As of 2016, tourism has begun to recover in Pakistan, albeit gradually, with a current global rank of 130.[85]

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.[86]

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 Increase 900.0 Increase 1076.6 Increase 1298.0 Increase 1499.4 Increase 1850.9 Increase 2077.8 Increase 2252.9 Increase 2566.5 Increase 2982.4 Increase 3637.3 Increase 3931.0 Increase 4447.0 Increase 4936.7 Increase5228.0 Decrease 4900.7 Increase6272.2 Increase 6903.4
Tax revenue Increase 632.6 Increase 753.0 Increase 919.3 Increase 1065.2 Increase 1316.7 Increase 1472.5 Increase 1699.3 Increase 2052.9 Increase 2199.2 Increase 2564.5 Increase 3017.6 Increase 3660.4 Increase 3969.2 Increase4467.2 Increase4473.4 Increase4747.8 Increase 5272.7
FBR taxes Increase590.4 Increase 713.4 Increase 847.2 Increase1008.1 Increase1161.2 Increase1327.4 Increase1558.0 Increase1882.7 Increase1946.4 Increase2254.5 Increase2590.0 Increase3112.5 Increase3367.9 Increase3842.1 Decrease3829.5 Increase3997.9 Increase 4764.3
Total Expenditures Negative increase 1117.0 Negative increase 1401.8 Negative increase 1675.5 Negative increase 2276.5 Negative increase 2531.3 Negative increase 3007.2 Negative increase 3447.3 Negative increase 3936.2 Negative increase 4816.3 Negative increase 5026.0 Negative increase 5387.8 Negative increase 5796.3 Negative increase 6800.5 Negative increase7488.4 Negative increase8345.6 Negative increase9648.5 Negative increase10306.7
Fiscal Deficit Negative increase217.0 Negative increase325.2 Negative increase377.5 Negative increase777.2 Positive decrease680.4 Negative increase929.4 Negative increase1194.4 Negative increase1369.7 Negative increase1833.9 Positive decrease1388.7 Negative increase1456.7 Positive decrease1349.3 Negative increase1863.8 Negative increase2260.4 Negative increase3444.9 Positive decrease3376.3 Negative increase 3403.3
As % of GDP
Total revenue Decrease 13.8 Decrease 13.1 Increase 14.0 Increase 14.1 Decrease 14.0 Steady 14.0 Decrease 12.3 Increase 12.8 Increase 13.3 Increase 14.5 Decrease 14.3 Decrease 13.6 Increase 13.9 Decrease13.3 Decrease 11.2 Increase13.2 Decrease 12.4
Tax revenue Decrease 10.1 Decrease 9.8 Decrease 9.6 Increase 9.9 Decrease 9.1 Increase 9.9 Decrease 9.3 Increase 10.2 Decrease 9.8 Increase 10.2 Increase 11.0 Increase 11.2 Steady 11.2 Increase 11.4 Decrease 10.2 Decrease 10.0 Decrease 9.5
Total expenditure Negative increase 17.2 Positive decrease 17.1 Negative increase 18.1 Negative increase 21.4 Positive decrease 19.2 Negative increase 20.2 Positive decrease 18.9 Negative increase 21.4 Negative increase 21.5 Positive decrease 20.0 Positive decrease 19.6 Positive decrease 17.7 Negative increase 19.1 Steady 19.1 Steady 19.1 Negative increase 20.3 Positive decrease 18.6
Fiscal deficit Negative increase 3.3 Negative increase 4.0 Negative increase 4.1 Negative increase 7.3 Positive decrease 5.2 Negative increase 6.2 Negative increase 6.5 Negative increase 8.8 Positive decrease 8.2 Positive decrease 5.5 Positive decrease 5.3 Positive decrease 4.1 Negative increase 5.2 Negative increase 5.8 Negative increase 7.9 Positive decrease 7.1 Positive decrease 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.[87][88][89]

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[90]
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.[91] 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.[92]

Amounts in million US dollars[93][94]
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 Increase 12,598 Increase 13122 Increase 15,647 Decrease 11,399 Increase 12,425 Increase 16,750 Increase 18,244 Decrease 15,289 Decrease 11,020 Increase 14,141 Increase 18,699 Increase 23,099 Decrease 21,403 Decrease 16,384 Decrease 14,482 Increase18,886 Increase 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)[95]
Sectors FY 2000 FY 2005 FY 2010 FY 2015 FY 2020 FY 2021
Agricultural Decrease 27.08 Decrease 23.98 Decrease 22.03 Decrease 20.71 Increase 23.54 Decrease 23.08
Industrial Increase 19.31 Increase 21.34 Decrease 21.04 Decrease 20.67 Decrease 18.52 Increase 18.91
Services Increase 53.61 Increase 54.68 Increase 56.93 Increase 58.61 Decrease 57.93 Increase 58.01

Major sectors

Agriculture

Main article: Agriculture in Pakistan

A mango orchard in Multan, 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.[96] 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.[97] 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.[98]

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.[99] 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.[65][63][100]

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 (%) Increase 2.85 Increase 7.02 Increase 1.27 Increase 3.42 Increase 1.81 Increase 3.50 Increase 0.23 Increase 1.96 Increase 3.62 Increase 2.68 Increase 2.50 Increase 2.13 Increase 0.15 Increase 2.22 Increase 3.88 Increase 0.94 Increase 3.91 Increase 3.48
Production of Important Crops (Million Tonnes)
Wheat 19.5 Increase 21.6 Decrease 21.3 Increase 23.3 Decrease 20.9 Increase 24.0 Decrease 23.3 Increase 25.2 Decrease 23.5 Increase 24.2 Increase 26.0 Decrease 25.1 Increase 25.6 Increase 26.7 Decrease 25.1 Decrease 24.3 Increase 25.2 Increase 27.3
Rice 4.8 Increase 5.0 Increase 5.5 Decrease 5.4 Increase 5.6 Increase 6.9 Steady 6.9 Decrease 4.8 Increase 6.2 Decrease 5.6 Increase 6.8 Increase 7.0 Decrease 6.8 Steady 6.8 Increase 7.5 Decrease 7.2 Increase 7.4 Increase 8.4
Sugarcane 53.4 Decrease 47.2 Decrease 44.7 Increase 54.7 Increase 63.9 Decrease 50.0 Decrease 49.4 Increase 55.3 Increase 58.4 Increase 63.8 Increase 67.5 Decrease 62.8 Increase 65.5 Increase 75.5 Increase 83.3 Decrease 67.2 Decrease 66.4 Increase 81.0
Cotton * 10.0 Increase 14.3 Decrease 13.0 Decrease 12.9 Decrease 11.7 Increase 11.8 Increase 12.9 Decrease 11.5 Increase 13.6 Decrease 13.0 Decrease 12.8 Increase 14.0 Decrease 9.9 Increase 10.7 Increase 11.9 Decrease 9.9 Decrease 9.1 Decrease 7.1
Maize 1.9 Increase 2.8 Increase 3.1 Steady 3.1 Increase 3.6 Steady 3.6 Decrease 3.3 Increase 3.7 Increase 4.3 Decrease 4.2 Increase 5.0 Decrease 4.9 Increase 5.3 Increase 6.1 Decrease 5.9 Increase 6.8 Increase 7.9 Increase 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.[101] 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.[64] 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 :-[102]

Minerals Unit of quantity 2014–2015 2015–2016 2016–2017 2017–2018 2018–2019 2019-2020
Coal Metric ton 3,406,851 Increase3,749,312 Increase3,953,992 Increase4,477,555 Increase5,406,878 Increase8,428,237
Natural Gas MMCFT 1,465,759 Increase1,481,550 Decrease1,471,854 Decrease1,458,935 Decrease1,436,546 Decrease1,316,636
Crude Oil JSB 34,490,000 Decrease31,652,000 Increase32,269,000 Increase32,557,000 Decrease32,495,000 Decrease28,091,000
Chromite Metric ton 100,516 Decrease69,333 Increase105,238 Decrease97,420 Increase138,244 Decrease121,435
Magnesite Metric ton 4,611 Increase35,228 Decrease19,656 Increase23,596 Increase42,996 Decrease16,165
Dolomite Metric ton 223,117 Increase666,755 Decrease301,124 Increase488,825 Decrease472,474 Decrease302,045
Gypsum Metric ton 1,417,007 Increase1,871,716 Increase2,079,629 Increase2,475,893 Increase2,517,825 Decrease2,149,873
Limestone Metric ton 40,470,357 Increase46,123,367 Increase52,149,137 Increase70,818,725 Increase75,596,328 Decrease65,809,924
Rock salt Metric ton 2,136,361 Increase3,552,984 Decrease3,534,075 Increase3,653,746 Increase3,799,106 Decrease3,368,978
Sulphur Metric ton 19,730 Decrease14,869 Increase23,740 Decrease22,040 Decrease20,715 Decrease19,948
Barytes Metric ton 24,689 Increase57,024 Increase75,375 Increase145,189 Decrease116,480 Decrease55,341
Soap stone Metric ton 100,724 Increase125,985 Increase152,279 Decrease141,504 Increase156,935 Decrease150,009
Marble Metric ton 2,815,601 Increase4,746,638 Increase4,906,233 Increase8,813,025 Decrease7,736,443 Decrease5,796,879
Bauxite Metric ton - - - Increase145,189 Decrease92,936 Increase101,047
Quartz Metric ton 38,117 Increase90,588 Increase98,909 Increase125,014 Decrease112,308 Decrease4,592

Industry

Main article: Industry of Pakistan

Pakistan's industrial sector accounts for approximately 19.12% of GDP.[95] In 2021 it recorded a growth of 3.57% as compared to the growth of negative 3.77% in 2020.[63] Manufacturing is the largest of Pakistan's industrial sectors, accounting for approximately 12.13% of GDP.[103] 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.[104] Major sectors in industries include cement, fertiliser, edible oil, sugar, steel, tobacco, chemicals, machinery, food processing and medical instruments, primarily surgical.[105][106][107] Pakistan is one of the largest manufacturers and exporters of surgical instruments.[108][109]

Production of Selected Manufactured Goods[110]
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.[111] 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.[63][112]

% 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 Increase 17.37 Increase 6.51 Increase 3.63 Increase 7.73 Increase 8.47 Decrease -5.21 Increase 3.42 Increase 4.51 Increase 2.55 Increase 0.75 Increase 4.53 Increase 5.18 Increase 5.69 Increase 4.61 Increase 9.18 Increase

0.25

Decrease -5.84 Increase 7.79
Manufacturing Increase 16.38 Increase 16.03 Increase 9.39 Increase 9.03 Increase 6.10 Decrease -4.18 Increase 1.37 Increase 2.50 Increase 2.08 Increase 4.85 Increase 5.65 Increase 3.88 Increase 3.69 Increase 4.87 Increase 7.08 Increase 4.52 Decrease -7.80 Increase 10.49
Mining Increase21.78 Decrease -15.83 Increase 3.60 Increase 7.35 Increase 3.15 Decrease -2.46 Increase 2.75 Decrease -4.42 Increase 5.16 Increase 3.88 Increase 1.40 Increase 4.97 Increase 6.19 Decrease -0.89 Increase 7.26 Increase 0.54 Decrease -7.13 Increase0.55
Construction Decrease -6.86 Increase16.78 Increase17.00 Increase12.91 Increase15.36 Decrease-9.88 Increase8.35 Decrease-8.56 Increase3.08 Increase1.08 Increase5.96 Increase7.26 Increase13.68 Increase10.20 Increase19.55 Decrease-18.14 Decrease-4.04 Increase5.33

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:[80]

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.[113]

Cement production capacity & dispatches (million tonnes)[114]
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.[citation needed] 2.7% of United States imports of clothing and other textiles is from Pakistan.[115]

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.[116] 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.[117]

Production & Sale of Vehicles[118]
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)[119]
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.[95] 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.[63]

% 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 Increase 8.14 Increase 8.20 Increase 5.58 Increase 4.94 Increase 1.33 Increase 3.21 Increase 3.94 Increase 4.40 Increase 5.13 Increase 4.46 Increase 4.36 Increase 5.72 Increase 5.62 Increase 5.95 Increase 5.00 Decrease -1.28 Increase 5.70

Telecommunication

Main article: Telecommunications in Pakistan

PTCL's One Stop Shop in Islamabad
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.[120] Pakistan won the prestigious Government Leadership award of GSM Association in 2006.[121]

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.[122]

Since liberalisation, over the past four years from 2003 to 2007 the Pakistani telecom sector has attracted more than $9 billion in foreign investments.[123] 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,[124] 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.[120]

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.[125]

PTA Reports[126][127]
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[128]
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[129]
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.[130]

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.[131] A privatization program in the 1990s led to the entry of foreign-owned and local banks into the industry.[131] 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.[131]

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.[132]

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.[133]

Financial Statements of Major Banks 2020[134][135] (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[136][137]
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.[138] 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.[139] 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)[119]
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[140]
indicator 2010 2013 2016 2017 2018 2019 2020 2021
Installed Capacity (MW) Increase 22,064 Increase 23,725 Increase 25,421 Increase 28,712 Increase 35,979 Increase 38,995 Decrease 38,719 Increase 39,772
Max Generation Capability (MW) Increase 12,751 Increase 14,600 Increase 17,261 Increase 19,020 Increase 23,766 Increase 24,565 Increase 27,780 Increase 27,819
Peak hours demand (MW) Increase 18,467 Increase 18,827 Increase 22.559 Increase 25,117 Increase 26,741 Decrease 25,627 Increase 26,252 Increase 28,253
+Surplus/-Deficit (MW) Negative increase -5,716 Increase -4,227 Negative increase -5,298 Negative increase -6,097 Increase -2,975 Increase -1,062 Increase +1,528 Negative increase -434
Electricity Generation (GWh) Increase 100,020 Decrease 98,655 Increase 114,093 Increase 120,622 Increase 133,588 Increase 137,005 Decrease 134,242 Increase 143,589
Electricity Consumption (GWh) Increase 78,768 Increase 81,389 Increase 94,354 Increase 99,616 Increase 110,891 Increase 113,142 Decrease 112,071 Increase 121,206
Transmission losses (%) Positive decrease 3.15 Positive decrease 3.05 Positive decrease 2.57 Positive decrease 2.31 Negative increase 2.43 Negative increase 2.83 Positive decrease 2.76 Negative increase 2.78
Distribution losses (%) Negative increase 18.37 Negative increase 18.59 Positive decrease 18.14 Positive decrease 17.93 Negative increase 18.32 Positive decrease 17.61 Negative increase 18.86 Positive decrease 17.95
(%) share in Electricity Generation
Hydel Decrease 28.56 Increase 30.44 Decrease 30.29 Decrease 26.59 Decrease 21.01 Increase 24.16 Increase 28.83 Decrease 27.02
Thermal Increase 68.50 Decrease 64.91 Decrease 64.57 Increase 65.34 Increase 68.87 Decrease 65.25 Decrease 60.21 Increase 61.76
Nuclear Decrease 2.67 Increase 4.24 Decrease 3.70 Increase 5.20 Increase 6.78 Decrease 6.67 Increase 7.37 Increase 7.72
Renewable Energy Increase 0.01 Increase 0.03 Increase 1.04 Increase 2.45 Increase 2.92 Increase 3.57 Decrease 3.21 Decrease 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[140]
Fiscal Year Unit Gas Oil Coal LNG

Import

Hydro

Electricity

Nuclear

Electricity

LPG Renewable

Electricity

Imported

Electricity

Total
2005 MTOE Increase 27.95 Increase 16.33 Increase 4.23 - Decrease 6.13 Increase 0.67 Increase 0.25 - Increase 0.03 Increase 55.59
%Share Increase 50.3 Decrease 29.4 Increase 7.6 - Decrease 11.0 Increase 1.2 Increase 0.5 - Increase 0.0 100
2010 MTOE Increase 30.81 Increase 19.81 Increase 4.62 - Increase 6.71 Increase 0.69 Increase 0.40 - Increase 0.06 Increase 63.09
%Share Decrease 48.8 Increase 31.4 Decrease 7.3 - Decrease 10.6 Decrease 1.1 Increase 0.6 - Increase 0.1 100
2015 MTOE Decrease 29.98 Increase 24.97 Increase 4.95 Increase 0.47 Increase 7.75 Increase 1.38 Increase 0.46 Increase 0.19 Increase 0.11 Increase 70.26
%Share Decrease 42.7 Increase 35.5 Decrease 7.0 Increase 0.7 Increase 11.0 Increase 2.0 Increase 0.7 Increase 0.3 Steady 0.1 100
2020 MTOE Decrease 26.66 Decrease 18.19 Increase 14.71 Increase 8.32 Increase 8.02 Increase 2.58 Increase 1.03 Increase 0.99 Increase 0.12 Increase 80.62
%Share Decrease 33.1 Decrease 22.6 Increase 18.3 Increase 10.3 Decrease 9.9 Increase 3.2 Increase 1.3 Increase 1.2 Increase 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.[141]

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.[142][143]

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 Increase 3521.0 Increase 5139.6 Increase 5410.2 Decrease 3719.9 Decrease 2150.8 Decrease 1634.8 Decrease 820.6 Increase 1456.5 Increase 1698.6 Decrease 1033.8 Increase 2392.9 Increase 2406.6 Increase 2780.3 Decrease1362.4 Increase2,561.2 Decrease1,847.4
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.

The foreign exchange receipts from these sales are also helping cover the current account deficit.[147]

Foreign trade

Main article: Foreign trade of Pakistan

A proportional representation of Pakistan exports, 2019
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.[148] 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.[149]

Note : This is the merchandised trade data (export and import) as released by the SBP.[150][151][152][153][154] 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 Increase 20.312 Increase 21.408 Increase 24.012 Decrease 23.213 Increase 24.893 Increase 31.114 Decrease 29.731 Increase 31.526 Decrease 30.423 Decrease 29.962 Decrease 27.428 Increase 27.918 Increase 30.619 Decrease 30.223 Decrease 27.973 Increase 31.512
Exports (Goods) Increase 16.572 Increase 17.301 Increase 20.448 Decrease 19.126 Increase 19.680 Increase 25.369 Decrease 24.718 Increase 24.802 Increase 25.078 Decrease 24.090 Decrease 21.972 Increase 22.003 Increase 24.768 Decrease 24.257 Decrease 22.536 Increase 25.630
Exports(Services) Increase 3.740 Increase 4.107 Decrease 3.564 Increase 4.087 Increase 5.213 Increase 5.745 Decrease 5.013 Increase 6.724 Decrease 5.345 Increase 5.872 Decrease 5.456 Increase 5.915 Decrease 5.851 Increase 5.966 Decrease 5.437 Increase 5.882
Total Imports Increase 33.183 Increase 35.289 Increase 45.439 Decrease 39.220 Decrease 38.119 Increase 43.570 Increase 48.688 Decrease 48.445 Increase 49.663 Increase 50.205 Decrease 50.120 Increase 58.577 Increase 67.948 Decrease 62.805 Decrease 52.398 Increase 61.658
Imports (Goods) Increase 24.893 Increase 26.873 Increase 35.282 Decrease 31.665 Decrease 31.132 Increase 35.796 Increase 40.370 Decrease 40.157 Increase 41.668 Decrease 41.357 Decrease 41.118 Increase 48.001 Increase 55.671 Decrease 51.869 Decrease 43.645 Increase 53.818
Imports (Services) Increase 8.290 Increase 8.416 Increase 10.157 Decrease 7.555 Decrease 6.987 Increase 7.774 Increase 8.318 Decrease 8.288 Decrease 7.995 Increase 8.848 Increase 9.002 Increase 10.576 Increase 12.277 Decrease 10.936 Decrease 8.753 Decrease 7.840
Trade deficit (Goods) Negative increase 8.441 Negative increase 9.711 Negative increase 14.970 Positive decrease 12.627 Positive decrease 11.452 Positive decrease 10.427 Negative increase 15.652 Positive decrease 15.355 Negative increase 16.590 Negative increase 17.267 Negative increase 19.146 Negative increase 25.998 Negative increase 30.903 Positive decrease 27.612 Positive decrease 21.109 Negative increase 28.188
Trade deficit as (%) of GDP Negative increase 6.5 Positive decrease 6.2 Negative increase 8.8 Positive decrease 7.5 Positive decrease 6.5 Positive decrease 4.9 Negative increase 7.0 Positive decrease 6.6 Negative increase 6.8 Positive decrease 6.4 Positive decrease 6.1 Negative increase 7.7 Negative increase 8.7 Positive decrease 8.6 Positive decrease 7.0 Negative increase 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