Pakistan’s economy continued to sustain its growth momentum in the FY2015-16. The gradual building up of the growth momentum suggests that investment recovery is more sustainable. The growth that the economy has sustained for last few eras is underpinned by dynamism in industry, agriculture and services supported by strong growth in local demand.
Government infrastructure development drive along with State Bank of Pakistan expansionary monetary policy stance has increased business activities.
The prerequisites for maintaining growth appear to have gained during the last few eras on account of economic reform and enhanced security situation. Inflation significantly reduced during the present years, and current account deficit narrowed with favorable rates for oil and other commodities.
Government introduced a mega relief package for small farmers counting direct cash support and provision of soft agriculture loans.
Furthermore, the Government of Pakistan approved a new Automobile Policy 2016-21, which offers tax incentives to new entrants to help them establish manufacturing units. Government has unveiled the Strategic Trade Policy Framework (STPF-2015-18) which aims to improve yearly exports to $35 billion, improve export competitiveness, transition from factor-driven economy to efficiency-driven and innovation driven economy and rise share in regional trade by June 2018.
Pakistan remained focused and committed to implement China-Pakistan Economic Corridor (CPEC) which is a mega project of US$46 billion with the Chinese government.
The FY2014 recorded growth of 4.05 percent, this growth performance continued in FY2015 as GDP registered a growth of 4.04 percent and in FY2016 GDP growth was recorded at 4.71 percent.
In the country presently CPI inflation General rose by 4.2 percent on year-on-year basis in February 2017 as compared to an increase of 3.7 percent in the previous month and 4 percent in February 2016.
On month-on-month basis, it rose by 0.3 percent in February 2017 as against to a rise of 0.2 percent in the previous month and a decline of 0.3 percent in February 2016. Core inflation measured by non-food non-energy CPI (Core NFNE) rose by 5.3 percent on (YoY) basis in February 2017 as against to increase of 5.4 percent in the previous month and 4.5 percent in February 2016.
On (MoM) basis, it rose by 0.2 percent in February 2017 as against to rise of 1.1 percent in previous month, and an increase of 0.2 percent in the same month of last year i.e. February 2016. Core inflation, measured by 20 percent weighted trimmed mean CPI (Core Trimmed) rose by 4.1 percent on (YoY) basis in February 2017 as against to 3.8 percent in the previous month and by 3.6 percent in February 2016. On (MoM) basis, it rose by 0.2 percent in February 2017 as against to a rise of 0.6 percent in the last month and a rise of 0.1 percent in same month of last year i.e. February 2016.
The overall unemployment rate in the country has declined from 6.2 percent in FY2012-13 to 5.9 percent in 2014 rural areas unemployment rate slightly from 5.1 percent to 5.0 percent during the corresponding period, where as in urban areas it declined considerably from 8.8 percent in 2012 percent in FY2014-15. Urban-rural comparison shows that in urban areas the unemployment rate is higher as against to rural areas.
This high rate of unemployment is mostly because of two reasons; first is rural urban migration which is due to rising urban population whereas job opportunities are not increasing accordingly. Secondly the industrial development has not yet reached to the position to absorb high level of working population.
According to the latest Pakistan Social and Living Standards Measurement (PSLM) Survey 2015, the literacy rate of the population (10 years and above) is 60 percent as compared to 58 percent during 2014. The literacy rate for male during 2015 was 70 percent and for female was 49 percent which explains that there is a gap of 21 percent of female literacy that needs to be bridged with the available resources and equalize the education between male and female.
The statistics shows that literacy rate is higher in urban areas (76 percent) than in rural areas (51 percent). Province wise statistic suggests that Punjab leads with 63 percent followed by Sindh with 60 percent, KPK with 53 percent and Balochistan with 44 percent.