Pakistan Economy - 2007

Economy - overview:

Pakistan, an impoverished and underdeveloped country, has suffered from decades of internal political disputes, low levels of foreign investment, and a costly, ongoing confrontation with neighboring India. However, IMF-approved government policies, bolstered by generous foreign assistance and renewed access to global markets since 2001, have generated solid macroeconomic recovery the last five years. The government has made substantial macroeconomic reforms since 2000, most notably privatizing the banking sector. Poverty levels have decreased by 10 percent since 2001, and Islamabad has steadily raised development spending in recent years, including a 52-percent real increase in the budget allocation for development in fiscal year 2007, a necessary step toward reversing the broad underdevelopment of its social sector. The fiscal deficit - the result of chronically low tax collection and increased spending, including reconstruction costs from the October 2005 earthquake - appears manageable for now. GDP growth, spurred by gains in the industrial and service sectors, remained in the 6-8% range in 2004-06. Inflation remains the biggest threat to the economy, jumping to more than 9% in 2005 before easing to 7.9% in 2006. The central bank is pursuing tighter monetary policy - raising interest rates in 2006 - while trying to preserve growth. 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.

GDP (purchasing power parity):
$427.3 billion (2006 est.)

GDP (official exchange rate):
$124 billion (2006 est.)

GDP - real growth rate:
6.5% (2006 est.)

GDP - per capita (PPP):
$2,600 (2006 est.)

GDP - composition by sector:
agriculture: 22%
industry: 26%
services: 52% (2006 est.)

Labor force:
48.29 million
note: extensive export of labor, mostly to the Middle East, and use of child labor (2006 est.)

Labor force - by occupation:
agriculture: 42%
industry: 20%
services: 38% (2004 est.)

Unemployment rate:
6.5% plus substantial underemployment (2006 est.)

Population below poverty line:
24% (FY05/06 est.)

Household income or consumption by percentage share:
lowest 10%: 4.1%
highest 10%: 27.6% (FY96/97)

Distribution of Family Income - Gini index:
41 (FY98/99)

Inflation rate (consumer prices):
7.9% (2006 est.)

Investment (gross fixed):
15.6% of GDP (2006 est.)

Budget:
revenues: $20.55 billion
expenditures: $25.65 billion; including capital expenditures of $NA (2006 est.)

Public debt:
55% of GDP (2006 est.)

Agriculture - products:
cotton, wheat, rice, sugarcane, fruits, vegetables; milk, beef, mutton, eggs

Industries:
textiles and apparel, food processing, pharmaceuticals, construction materials, paper products, fertilizer, shrimp

Industrial production growth rate:
6% (2006 est.)

Electricity - production:
80.24 billion kWh (2004)

Electricity - consumption:
74.62 billion kWh (2004)

Electricity - exports:
0 kWh (2004)

Electricity - imports:
0 kWh (2004)

Oil - production:
63,000 bbl/day (2005 est.)

Oil - consumption:
324,000 bbl/day (2004 est.)

Oil - exports:
NA bbl/day (2004)

Oil - imports:
NA bbl/day (2004)

Oil - proved reserves:
358.9 million bbl (2006 est.)

Natural gas - production:
27.4 billion cu m (2004 est.)

Natural gas - consumption:
27.4 billion cu m (2004 est.)

Natural gas - exports:
0 cu m (2004 est.)

Natural gas - imports:
0 cu m (2004 est.)

Natural gas - proved reserves:
759.7 billion cu m (1 January 2005 est.)

Current account balance:
$-5.486 billion (2006 est.)

Exports:
$19.24 billion f.o.b. (2006 est.)

Exports - commodities:
textiles (garments, bed linen, cotton cloth, yarn), rice, leather goods, sports goods, chemicals, manufactures, carpets and rugs

Exports - partners:
US 24.8%, UAE 7.8%, Afghanistan 6.6%, UK 5.7%, Germany 4.5% (2005)

Imports:
$26.79 billion f.o.b. (2006 est.)

Imports - commodities:
petroleum, petroleum products, machinery, plastics, transportation equipment, edible oils, paper and paperboard, iron and steel, tea

Imports - partners:
Saudi Arabia 11.1%, UAE 10.3%, China 9.2%, Japan 6.4%, US 6%, Kuwait 5%, Germany 4.5% (2005)

Reserves of foreign exchange and gold:
$13.29 billion (2006 est.)

Debt - external:
$42.38 billion (2006 est.)

Economic aid - recipient:
$2.4 billion (FY01/02)

Currency (code):
Pakistani rupee (PKR)

Exchange rates:
Pakistani rupees per US dollar - 60.5 (2006), 59.515 (2005), 58.258 (2004), 57.752 (2003), 59.724 (2002)

Fiscal year:
1 July - 30 June