Pakistan—Economic Outlook and Prospects

South Asia Economic Journal, 2007

Military governments in Pakistan and elsewhere claim legitimacy based on superior economic management and the pretext for assuming power is usually corruption and economic mismanagement of incumbent political regimes. Ever since the current military government seized power in Pakistan in October 1999, it has, like earlier military governments, claimed to have turned the economy around citing selective statistics. A more careful and comprehensive review of the same statistics suggests that this claim is exaggerated. Also, like past military governments, this one has ignored investing in people, and the human condition as measured by unemployment and poverty has worsened and as measured by other social indicators the progress has notably slackened. Most now agree that improving the human condition is a necessary condition for robust and sustainable economic growth and by this criterion the military government has not done well.

2003

2004

This Working Paper should not be reported as representing the views of the IMF.

The Pakistan Development Review

This article has five parts. The first provides an overview of major structural weaknesses in the Pakistani economy—I call them faultlines. The following three parts describe the programme of stabilisation and structural reform introduced by the caretaker administration of Prime Minister Meraj Khalid. This government was in office for 104 days, from November 5, 1996 to February 17, 1997. On February 17, the government headed by Prime Minister Mian Nawaz Sharif took office. The fifth part provides a brief assessment of what lies in Pakistan’s future if the problems created by delayed structural reforms are not addressed adequately and on time.

Pakistan was one of the top 10 fastest growing developing countries between 1960 and 1990 recording an annual average growth rate of 6 per cent. The structure of the economy was also transformed during this period with the share of agriculture coming down from 50 per cent to 20 per cent. The subsequent 25 years have, however, brought about a significant decline in growth rates and in more recent seven years, it has lagged behind other South Asian countries. A combination of political instability and disruption of evolving democratic process, lack of continuity in policies and poor governance have contributed to this outcome. Pakistan has also not utilized its geographic location to take advantage of intra-regional trade and investment. Many promising opportunities were lost due to lingering tension with India. The future potential can only be realized if Pakistan is able to position itself for meeting the future challenges of integration into the regional and global economy, reaping demographic dividends because of youthful population and moving up the ladder of technology. The realization of these goals will depend upon sound macroeconomic policies, strong institutional and governance framework, investment in infrastructure and human development and political stability.

sbp.org.pk

2009

2021

Pakistan’s economy has seriously affected by COVID-19, which devastated the economic activities and the individuals’ daily lives. This paper discusses some important economic indicators, i.e., GDP growth, inflation, GDP per capita income, entrepreneurship activities and the impacts of the COVID-19 on the economy of Pakistan. Besides, the study highlights the prediction of the upcoming year, taking into consideration of such indicators. This study is a desk review where secondary data is derived from reliable sources. The findings of the study highlight that Pakistan’s economy has been collapsed with different issues. Among these issues, the arrival of the COVID-19 has appeared as a dangerous situation for the economy. It has been devastated all segments of business and individuals’ lives and also entrepreneurship. However, the different predictions regarding Pakistan’s economy claim a massive increase in GDP, per capita income, entrepreneurship activities and inflation decline. In o...

2000

The analysis of economic crisis indicates that there is a considerable shift of public resources from social sector to defense sector and security affairs. This shift has changed the development priorities and financial resources have been taken away from socio-economic sector. Supply bottlenecks including gas and power load shedding are considered as a major factor affecting private investment and economic growth. Terrorism has taken a high toll on Pakistan’s economy which leads to slow economic growth, low investment, high rate of inflation, and higher levels of fiscal deficits. Low economic growth and decline in private investment also leads to higher rate of unemployment, which further aggravated the economic situation of the country.

Economic Growth, Economic Performance and Welfare in South Asia

After a retarded economic growth over the past few years, a recovery in economic growth rate began as result of faster growth in industrial sector and respectable growth in services sectors. Although macroeconomic stability has been achieved, the reduction in fiscal deficit was also at the expense of public sector development and social sector expenditure over the past few years. While acceleration and pattern of economic growth together with stagnant investment are not propoor since sufficient employment is not likely to be created, the recent surge in food inflation will hurt the poor. While economic reform programmes undertaken within the framework of IMF/World Bank over past 15 years were aimed at increasing efficiency and/or reducing poverty, the trends in various dimensions of poverty indicate that absolute poverty and inequality have worsened and progress in human development dimensions remained poor in Pakistan.

Lahore School Modeling Lab Reports, 2023

The Lahore School of Economics macro model for the Pakistan economy projects that GDP growth over the fiscal year July 2022 – June 2023, (FY 2023), will be 0.05%. This flatline estimation for the annual growth rate of GDP for FY 2023, has been due to successive quarters of falling GDP growth. Our model’s estimates show that the flood damage to lives, livelihoods, and incomes, over the first quarter (Q1) of the fiscal year, from July to September 2022, has taken a devastating toll. This loss has been followed in quarters two, three and four (Q2, Q3, Q4) by sectoral growth being hit by import constraints and economic uncertainty. A Balance of Payments (BOP) crisis, with a depreciating exchange rate, and falling Reserves for the State Bank of Pakistan (SBP), have resulted in these import constraints, especially weakening manufacturing growth. The coefficient for the import content of capital goods, intermediate goods, and energy, contributing to value added in manufacturing being quite high.

Lahore School Modeling Lab Reports, 2024

The Lahore School of Economics macro model for the Pakistan economy estimates that GDP growth over the fiscal year FY 2023-2024 (Jul-Jun) has been 1.68%. This low estimate of GDP growth for FY 2023-2024, is based on a sustained weakness in sectoral growth over the first quarter (Q1), especially in large scale manufacturing, which has barely broken even, from the contraction of the previous year FY 2022-2023 of - 2.9%, compounded by a weak, below trend growth, recovery in agriculture. Our model projects that GDP growth accordingly should rise to 3.3% for FY 2024-25.