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Brief economic review of Pakistan

Since 1947 to present, various governments took charge of Pakistan and have been trying to achieve the economic targets but unluckily due to some major challenges the targets couldn’t achieve in the appropriate and complete manner. Some country’s economic experts are of the view that economic growth has historically remained volatile, lacking a steady growth path and adding to the economic unrest of Pakistan’s economic conditions. Historical statistics suggests that Pakistan reached a high of above 10 percent growth level during 1954, but the following year it fell to 2 percent and went up again to above 9 percent between 1969 and 1970. Then it dipped again to 1.2 percent in the following year. Likewise, it stood 7.5 percent during FY2005 but explained down to 5.6 percent next year and further dropped to 5.5 percent in FY2007. From 2007-08 to 2012-13 the economy of Pakistan rose by 3.2 percent on an average.

The country is the 24th largest globally in terms of purchasing power parity (PPP), and 42nd largest in terms of nominal GDP (Gross domestic products). Economists of the country have calculated that Pakistan has continued the growth momentum as the GDP growth stood to 5.28 percent during FY2016-17 as compared to the growth of 4.5 percent recorded previous fiscal year. They said that the economic growth during FY2017 is highest in the last decade.

INFLATION

During FY2016, low oil and commodities rates, stable currency value, smooth supply of commodities and checking of prices levels in Pakistan were the key causes behind a contained inflation. Economists revealed that the CPI inflation registered a fall of 2.86 percent and was broad based and visible across various subheads like food 2.08 percent, non food 3.41 percent, core 4.17 percent and other indices such as SPI (Sensitive Price Indicator) 1.31 percent and WPI (Wholesale Price Index) -1.05 percent. The FY2016-17 started with inflation at 4.1 percent in July 2016, increased to 4.9 percent in March 2017 and then slowed down to 4.8 percent during April 2017. On average during July-April FY 2017, it registered at 4.1 percent.

WORKERS REGISTERED FOR OVERSEAS EMPLOYMENT
Year
Federal
Punjab
Sindh
KPK
Balochistan
Azad Kashmir
N/areas
Tribal area
Total
2013
7,109
326,012
55,608
150,418
9,293
40,038
1,190
33,046
622,714
2014
8,943
383,533
89,703
167,424
7,258
52,120
2,073
41,412
752,466
2015
9,028
478,646
116,935
220,993
7,686
64,586
2,899
45,798
946,571
2016
8,472
446,566
85,326
206,929
6,378
43,093
2,961
39,628
839,353
CURRENT ACCOUNT

Pakistan’s current account deficit stood to US$6.1 billion during July-March FY2016-17. Economists said this was chiefly because of a 33.1 percent widening in the trade deficit, which valued to US$17.8 billion. The widening of trade deficit is mostly because of surge in import bill by 14.2 percent and stood to US$33.9 billion and the export fall was contained to US$221 million during July-March FY2017 as against to the corresponding period previous year.

LIQUID FOREIGN RESERVES

The State Bank of Pakistan (SBP) mentioned presently in a report that the break-up of the foreign reserves position such as (i) Foreign reserves held by the SBP: US$15,003.1 million; ii) Net foreign reserves held by commercial banks: US$5,433.1 million; iii) Total liquid foreign reserves: US$ 20,436.2 million. During the week closing July 21, 2017, SBP’s reserves declined by US$476 million to US$15,003 million because of payments on account of external debt servicing and other official payments.

LITERACY RATE

According to the Household Integrated Income and Consumption Survey (HIICS) 2015-16 at national/provincial levels with urban/rural breakdown, Pakistan’s literacy rate of the population (10 years and above) stayed at 58 percent as against to last conducted PSLM survey at national/provincial level in 2013-14. The government’s statistics identified that literacy remains much higher in urban regions; 74 percent than in rural regions; 49 percent, with male 81 percent and female 68 percent in urban areas. The statistics also suggested that Punjab and Sindh lead with 62 percent and 55 percent respectively followed by Khyber Pakhtunkhwa (KPK) with 53 percent and Balochistan with 41 percent.

HEALTH EXPENDITURE

The government’s statistics also identified that Pakistan is spending 0.5 to 0.8 percent of its GDP on health over the last 10-year. These percentages are less than the World Health Organization (WHO) benchmark of at least 6 percent of GDP required to provide basic and life saving services. It is also mentioned that during 2015-16, the total expenditure grew by 13 percent over 2014-15, and during July-March 2016-17, the expenditure remain at 145.97 billion explaining a rise of 9 percent over the corresponding period of previous year.

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World economists also revealed that currently Pakistan’s per capita health spending is US$36.2, which is below than the WHO’S low income states benchmark of US$86.

MANUFACTURING

During July-March FY 2017, LSM (Large Scale Manufacturing) recorded an impressive growth of 5.1 percent as against to 4.6 percent in the corresponding period last year. The yearly, LSM registered an important growth of 10.5 percent in March 2017 as against to 7.6 percent of March 2016. The production statistics of LSM received from OCAC comprising 11 items, the Ministry of Industries and Production 36 items and PBS 65 items have contributed in LSM period average growth by 0.03 percent, 3.97 percent and 1.07 percent, respectively.

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