economy, pakistan, this, article, multiple, issues, please, help, improve, discuss, these, issues, talk, page, learn, when, remove, these, template, messages, this, article, needs, additional, citations, verification, please, help, improve, this, article, addi. This article has multiple issues Please help improve it or discuss these issues on the talk page Learn how and when to remove these template messages This article needs additional citations for verification Please help improve this article by adding citations to reliable sources Unsourced material may be challenged and removed Find sources 160 Economy of Pakistan 160 160 news 160 newspapers 160 books 160 scholar 160 JSTOR January 2023 Learn how and when to remove this template message This article needs to be updated Please help update this article to reflect recent events or newly available information January 2023 Learn how and when to remove this template message Economy of PakistanKarachi the financial hub of PakistanCurrencyPakistani rupee PKR Fiscal year1 July 30 JuneTrade organisationsECO SAFTA WTO AIIB ADB and othersCountry groupDeveloping economy 91 1 93 lower middle income 91 2 93 StatisticsPopulation241 499 431 5th 2023 Census 91 3 93 GDP 340 64 billion nominal 2023 91 4 93 1 57 trillion PPP 2023 est 91 4 93 GDP rank46th nominal 2023 24th PPP 2023 GDP growth6 1 160 FY 2022 91 4 93 0 5 160 FY 2023 91 4 93 GDP per capita 1 471 nominal 2023 91 4 93 6 773 PPP 2023 est 91 4 93 GDP per capita rank161st nominal 2023 91 a 93 138th PPP 2023 est 91 a 93 GDP by sectorAgriculture 22 68 Industry 19 11 Services 58 20 FY 2022 91 5 93 GDP by componentHousehold consumption 82 0 Government consumption 11 3 Investment in fixed capital 14 5 Investment in inventories 1 6 Exports of goods and services 8 2 Imports of goods and services 17 6 2017 est 91 6 93 Inflation CPI 28 3 January 2024 YoY 91 7 93 Base borrowing rate22 00 January 2024 91 8 93 Population below poverty line35 7 on less than 3 20 day 2021 91 9 93 91 10 93 91 11 93 5 in extreme poverty 2022 91 12 93 8 rural 160 0 3 urban Gini coefficient31 6 medium 2018 World Bank 91 13 93 Human Development Index0 544 low 2022 91 14 93 161st 0 380 low IHDI 2021 91 15 93 Labour forceTotal 71 76 million Employed 67 25 million 2021 91 16 93 Labour force by occupationAgriculture 37 4 Industry 25 4 Services 37 2 2021 91 16 93 Unemployment7 2023 91 17 93 17 4 million unemployed 2023 91 17 93 Main industriesTextiles Apparel Food processing Pharmaceuticals Surgical instruments Construction materials Fertilizer Shrimp Paper productsExternalExports 35 210 billion FY 2023 91 18 93 Export goodsTextiles 16 628 million Food 4 740 million Chemicals and Pharmaceuticals 1 424 million Leather goods 627 million Sports goods 461 million Petroleum 290 million 91 19 93 Main export partners 160 United States 21 2 160 China 7 3 160 United Kingdom 7 0 160 Germany 5 7 160 United Arab Emirates 5 3 160 Netherlands 5 2 160 Spain 4 9 160 Italy 4 1 2023 est 91 20 93 Imports 60 013 billion FY 2023 91 18 93 Import goodsPetroleum 17 538 million Agriculture and other chemicals 8 253 million Machinery 4 431 million Food 7 966 million Textile 4 565 million Metal 3 450 million Transport 1 266 million 91 21 93 Main import partners 160 China 18 6 160 United Arab Emirates 14 3 160 Saudi Arabia 6 4 160 Singapore 5 3 160 United States 4 3 160 Indonesia 5 1 160 Kuwait 4 9 160 Malaysia 2 0 2023 est 91 20 93 FDI stock 31 540 billion Abroad 1 870 billion 31 Dec 2021 91 22 93 Current account 2 557 billion US FY 2023 91 23 93 Gross external debt 125 7 billion Mar 2023 91 24 93 Public financesGovernment debt73 5 of GDP Jun 2022 91 25 93 Budget balance 7 9 of GDP FY 2022 91 26 93 Revenues12 0 of GDP 8 035 billion PKR or 45 billion FY 2022 91 26 93 Expenses19 9 of GDP 13 295 billion PKR 75 billion FY 2022 91 26 93 Economic 160 aid 2 6983 160 billion 2021 91 27 93 Credit ratingStandard amp Poor s 91 28 93 B Domestic B Foreign B T amp C Assessment Outlook Negative Moody s 91 29 93 Caa1 Outlook Negative Fitch 91 30 93 CCC July 2023 91 31 93 91 32 93 Outlook NegativeForeign reserves 8 27bn January 2024 91 33 93 115th Main data source CIA World Fact Book All values unless otherwise stated are in US dollars The economy of Pakistan is categorized as a developing economy It ranks as the 24th largest based on GDP using purchasing power parity PPP and the 46th largest in terms of nominal GDP With a population of 232 million people as of 2023 Pakistan s position at per capita income ranks 161st by GDP nominal and 138th by GDP PPP according to the International Monetary Fund IMF 91 4 93 In its early years Pakistan s economy relied heavily on private industries The nationalization of a significant portion of the sector including financial services manufacturing and transportation began in the early 1970s under Zulfikar Ali Bhutto During Zia ul Haq s regime in the 1980s an Islamic economy was adopted outlawing economic practices forbidden in Shariʿah and mandating traditional religious practices The economy started privatizing again in the 1990s The economic growth centers in Pakistan are located along the Indus River 91 34 93 91 35 93 these include the diversified economies of Karachi and major urban centers in Punjab such as Faisalabad Lahore Sialkot Rawalpindi and Gujranwala alongside less developed areas in other parts of the country 91 34 93 Pakistan was classified as a semi industrial economy for the first time in the late 1990s albeit an underdeveloped country 91 36 93 with a heavy dependence on agriculture particularly the textile industry relying on cotton production 91 37 93 91 34 93 91 38 93 Primary export commodities include textiles leather goods sports equipment chemicals and carpets rugs 91 39 93 91 40 93 Pakistan is presently undergoing economic liberalization including the privatization of all government corporations aimed at attracting foreign investment and reducing budget deficits 91 41 93 However the country continues to grapple with challenges such as a rapidly growing population high illiteracy political instability a hostile neighborhood and heavy foreign debt Contents 1 Economic history 1 1 Inception 1 2 1950s 1 3 1960s 1 4 1970s 1 5 1980s 1 6 1990s 1 7 2000s 2 Data 2 1 Gross domestic product GDP 2 2 Stock market 2 3 Middle class 2 4 Poverty alleviation expenditures 2 5 Employment 2 6 Government revenues and expenditures 3 Currency system 3 1 Rupee 3 2 Foreign exchange rate 3 3 Foreign exchange reserves 4 Structure of economy 5 Major sectors 5 1 Agriculture 5 2 Industry 5 2 1 Manufacturing 5 2 1 1 Cement industry 5 2 1 2 Fertilizer industry 5 2 1 3 Defence industry 5 2 1 4 Textiles industry 5 2 1 5 Automobile Industry 5 2 2 Mining 5 2 3 Energy 5 3 Services 5 3 1 Telecommunication 5 3 2 Transportation 5 3 2 1 Air linkage 5 3 2 2 Railway Linkage 5 3 2 3 Road Linkage 5 3 2 4 Maritime Linkage 5 3 3 Finance 5 3 4 Housing 5 3 5 Tourism 6 Foreign trade remittances aid and investment 6 1 Investment 6 2 Foreign acquisitions and mergers 6 3 Foreign trade 6 3 1 Exports 6 3 2 Imports 6 4 External imbalances 6 5 Economic aid 6 6 Remittances 7 Economic issues 7 1 2022 Pakistan economic crisis 7 2 Corruption 7 3 Debt 8 See also 9 Notes 10 References 11 Further reading 12 External links Economic history Main article Economic history of Pakistan Inception In the late 1940s upon its establishment Pakistan had an agrarian based economy Agriculture constituted 53 of the country s GDP in 1947 and slightly increased to 53 2 in 1949 50 With a population of approximately 30 million including around 6 million residing in urban areas about 65 of the labor force was engaged in agriculture The agricultural sector played a crucial role contributing to 99 2 of exports and making up nearly 90 of foreign exchange earnings Despite possessing significant land and mineral resources in both East and West Pakistan including natural gas crude oil coal limestone and marble Pakistan faced numerous challenges In 1950 its per capita income was around 360 in 1985 international dollars and the literacy rate was only 10 The nation encountered a lack of economic infrastructure financial resources and an industrial foundation particularly with poverty rates ranging from 55 to 60 in the West Pakistan region Due to limited capital in the small private sector the government opted to focus on the public sector to foster economic and industrial development In the fiscal year 1949 50 Pakistan recorded a national savings rate of 2 a foreign savings rate of 2 and an investment rate of 4 Manufacturing contributed 7 8 to the GDP while services trade and other sectors accounted for a significant 39 reflecting a policy centered around import substituting industrialization The trade balance of payments indicated a deficit of 66 million Rupees Rs during the period spanning 1949 50 to 1950 51 91 42 93 1950s The 1950s marked the initiation of planned development in Pakistan with the introduction of the Colombo Plan in 1951 leading to a series of Five Year Plans from 1955 to 1998 Concurrently a Ten Year Perspective Plan was implemented complemented by a rolling Three Year Development Plan During the 1950s Pakistan pursued a policy of import substituting industrialization Notably the Korean War 1950 1953 brought substantial merchant profits to Pakistan s public and emerging private sectors fueling industrialization In 1952 Pakistan imposed bans on the imports of cotton textiles and luxury goods followed by comprehensive import regulations in 1953 propelling the country into the ranks of the fastest growing nations However biased policies against agriculture and unfavorable trade terms between agriculture and industry led to a decline in the annual growth rate of agriculture By the late 1950s Pakistan achieved self sufficiency in cotton textiles emphasizing export development The influx of US military and economic aid amounting to US 500 million during 1955 58 contributed to Pakistan s growth reliant on foreign aid In 1959 after a military coup d etat in 1958 the martial law regime introduced export bonus vouchers as import licenses and exempted certain goods from licensing During this period Pakistan faced a worsening trade balance with deficits increasing from 831 million Rupees in 1950 51 to 1043 million Rupees in 1959 60 Economically agriculture grew at an annual rate of 1 6 while manufacturing expanded impressively at 7 7 per annum during the 1950s In the fiscal year 1959 60 the Per Capita Gross National Product GNP stood at Rs 355 in West Pakistan and Rs 269 in East Pakistan indicating a growing economic disparity between the two regions 91 42 93 1960s In the 1960s amid a substantial influx of American aid Pakistan enjoyed political stability fostering robust economic growth Poverty measured by the poverty headcount ratio fluctuated from nearly 50 in the early 1960s to 54 in 1963 64 During the 1960s Pakistan achieved an impressive annual agricultural growth rate of 5 driven by substantial investments in water resources increased farmer incentives mechanization greater use of fertilizers and pesticides and expanded cultivation of high yielding rice and wheat varieties in the Green Revolution Large scale manufacturing experienced significant growth expanding at a remarkable rate of 16 per annum from 1960 61 to 1964 65 fueled by protective measures for domestic industries including export subsidies However the Pakistan India War of 1965 led to reduced foreign economic assistance impacting the growth rate of large scale manufacturing From 1965 70 this sector grew at a comparatively lower rate of 10 per annum Despite challenges Pakistan achieved an impressive average annual GDP growth rate of 6 7 throughout the 1960s In the fiscal year 1969 70 the poverty incidence rate decreased to 46 Per Capita GNP was Rs 504 in West Pakistan and Rs 314 in East Pakistan indicating a widening regional economic disparity 91 42 93 1970s The economic landscape in the early 1970s witnessed growing disparities between East and West Pakistan leading to East Pakistan s declaration of independence and the emergence of Bangladesh in 1971 Subsequently Pakistan underwent notable transformations in both its political and economic spheres Under martial law authorities amidst challenging macroeconomic conditions the socialist Pakistan People s Party gained empowerment This period grappled with numerous economic challenges including a surge in poverty incidence to 55 during 1971 72 Pakistan also confronted heightened import costs due to the global oil price shock in October 1973 a severe global recession from 1974 to 1977 cotton sector failures in 1974 75 pest infestations affecting crops and massive floods in 1973 1974 and 1976 77 One significant economic issue during this time was high inflation with prices increasing by an average of 15 per annum between 1972 and 1977 The fiscal deficit GDP ratio averaged 8 1 during 1973 77 indicating substantial fiscal challenges Trade imbalances were apparent with trade deficits rising from US 337 million in 1970 71 to US 1 184 million in 1976 77 The military coup d etat of 1977 leading to the establishment of a martial law regime that initiated denationalization deregulation and privatization policies Agriculture experienced modest growth at a rate of 2 4 per annum while large scale manufacturing expanded at a rate of 5 5 per annum during the 1970s Large and medium scale private manufacturing played a significant role contributing 75 of the total value added and investment in manufacturing during the 1970s The remaining 25 of value added came from small scale manufacturing Overall this period was marked by significant political and economic changes driven by challenges posed by economic disparities political shifts and efforts to address issues such as inflation fiscal deficits and trade imbalances 91 42 93 1980s The 1980s brought substantial changes to Pakistan s economic landscape moving away from the nationalization policies of the 1970s and fostering private sector industrial investment which greatly contributed to robust economic growth Notable developments in this era included a drop in the poverty headcount ratio to 29 1 in 1986 87 showcasing a decline in poverty incidence The unemployment rate exhibited a positive trend decreasing from 3 7 in 1980 to 2 6 in 1990 Between 1985 and 1988 the government endeavored to implement an Islamic interest free banking system introducing business partnerships based on profit and loss sharing The national savings GDP ratio reached a notable 16 in 1986 87 largely due to significant worker remittances from the Middle East Despite this growth challenges emerged including negative public savings and a declining public investment GDP ratio throughout the 1980s To address increasing budget deficits in the early 1980s the government heavily relied on non bank domestic borrowing resulting in substantial domestic debt growth Consequently the public debt GDP ratio surged to 77 1 in 1988 81 9 in 1989 and 82 6 in 1990 leading to significant interest payments and persistent fiscal deficits In 1985 democracy was restored in Pakistan marking a pivotal political development The country experienced a commendable average annual GDP growth rate of 6 3 between 1980 and 1990 The 1980s saw a surge in manufacturing exports with an annual large scale manufacturing growth rate of 8 8 and solid growth in agriculture with an annual agricultural growth rate of 5 4 These highlights underscore a transformative and recovering economic period in the 1980s characterized by a shift in economic policies improved fiscal performance and substantial progress in poverty reduction and employment The era also witnessed efforts to align financial practices with Islamic principles and significant economic growth in the manufacturing and agricultural sectors 91 42 93 1990s The 1990s posed a formidable economic landscape for Pakistan marked by a series of challenges and developments Declining worker remittances and escalating external deficits set the tone for economic strains Simultaneously the decade witnessed the second worst inflation in Pakistan s history driven by diminishing GDP growth rates Unemployment surged reaching 5 9 in 1991 and escalating further to 7 2 in 2000 Pakistan s external debt tripled soaring to US 30 billion by 1995 The external debt GDP ratio rose from 42 to 50 accompanied by increases in the external debt exports ratio from 209 to 258 and the debt service ratio from 18 to 27 A deteriorating external debt profile led to a rise in domestic debt reaching Rs 909 billion and a domestic debt GDP ratio of 42 The late 1990s witnessed a severe debt crisis with the public debt GDP ratio skyrocketing from 57 5 in 1975 77 to 102 in 1998 99 The public debt revenues ratio surged to 624 and the interest payments revenues ratio reached 42 6 rendering Pakistan s public debt unsustainable Concerns over external debt default emerged in 1996 and 1998 triggered by Western economic sanctions in response to Pakistan s nuclear tests in May 1998 causing massive capital flight Despite these challenges Pakistan managed to sustain an agricultural growth rate of 4 4 per annum and a large scale manufacturing growth rate of 4 8 per annum throughout the 1990s However the era witnessed a significant increase in poverty incidence reaching 30 6 in 1998 99 The decade encapsulated a complex economic narrative as Pakistan navigated external debt burdens fiscal imbalances inflation and rising unemployment Amid these difficulties there were positive aspects including growth in key sectors like agriculture and manufacturing Nonetheless the 1990s also brought forth a looming threat of debt default magnified by Western sanctions in response to nuclear tests 91 42 93 2000s The 2000s witnessed a period of substantial economic challenges and transformations for Pakistan The impact of high public debt gained prominence identified by the official Debt Reduction and Management Committee in 2001 contributing to a decline in the growth rate to less than 4 per annum Despite an initial upturn in the growth rate the decade unfolded with persistent macroeconomic crises Although achieving a noteworthy growth rate of 8 6 in 2004 05 subsequent years were marred by a series of setbacks including a growth slowdown low growth high inflation an energy crisis and worsening fiscal and balance of payments positions The economic landscape reflected the complexities faced by the population illustrated by a rise in poverty incidence to 34 5 in 2000 01 However a subsequent decrease to 22 3 in 2005 06 offered a nuanced perspective on the decade s economic trajectory The unemployment rate saw fluctuations rising to 7 8 in 2002 but later declining to 5 by 2008 Efforts to enhance education and literacy rates were evident as adult literacy stood at 55 in 2007 08 Nevertheless challenges persisted and economic crises hit Pakistan in 2008 primarily influenced by the global financial crisis Despite these adversities economic growth in 2009 2010 reached a respectable 4 1 with positive contributions from various sectors including a 2 growth in agriculture 4 9 growth in industrial output 4 4 growth in large scale manufacturing and a 4 6 expansion in the services sector By March 2010 public debt had accumulated to Rs 8 160 billion with a total public debt GDP ratio of 56 and a foreign currency denominated debt GDP ratio of 25 Amid these economic dynamics Pakistan underwent a structural transition The GDP share of agriculture declined from 53 in 1947 to 21 2 in 2010 while the GDP share of industry rose from 9 6 in 1949 50 to 25 4 in 2010 Additionally the GDP share of the services sector increased from 37 2 in 1950 to 53 4 in 2010 The 2000s encapsulated a multifaceted economic narrative for Pakistan marked by challenges crises and significant structural shifts reflecting the nation s resilience and adaptability 91 42 93 Data Gross domestic product GDP See also List of Pakistani provinces by gross domestic productThe table below displays key economic indicators from 1980 to 2022 Inflation rates below 5 are highlighted in green 91 4 93 Year GDP Billion US PPP GDP per capita US PPP GDP Billion US nominal GDP per capita US nominal GDP growth Real Inflation rate Percent Unemployment Percent Government debt of GDP 1980 79 0 950 0 34 8 418 9 7 3 11 9 n a n a 1981 91 8 1 072 8 41 2 481 3 6 4 11 9 n a n a 1982 104 9 1 190 0 45 0 511 0 7 6 5 9 n a n a 1983 116 4 1 283 6 42 0 463 7 6 8 6 4 3 9 n a 1984 125 4 1 345 3 45 6 489 8 4 0 6 1 3 8 n a 1985 140 6 1 468 4 45 6 476 7 8 7 5 6 3 7 n a 1986 152 5 1 551 3 46 7 475 3 6 4 3 5 3 3 n a 1987 165 4 1 638 5 48 8 483 9 5 8 4 7 3 1 n a 1988 182 2 1 759 4 56 3 543 1 6 4 8 8 3 1 n a 1989 198 5 1 868 3 58 7 552 0 4 8 7 9 3 1 n a 1990 215 4 1 970 1 58 9 538 4 4 6 9 1 3 1 n a 1991 234 1 2 094 8 66 9 598 4 5 4 12 6 5 9 n a 1992 257 5 2 211 1 71 5 614 2 7 6 4 8 5 9 n a 1993 269 2 2 252 4 75 7 633 6 2 1 9 8 4 7 n a 1994 286 9 2 341 1 76 3 622 8 4 4 11 3 4 8 64 8 1995 307 8 2 449 6 89 2 709 9 5 1 13 0 5 4 58 0 1996 334 1 2 594 8 93 1 723 5 6 6 10 8 5 4 58 2 1997 345 6 2 620 8 91 8 696 4 1 7 12 8 6 1 58 5 1998 361 7 2 678 9 91 4 677 0 3 5 6 8 5 9 59 5 1999 382 2 2 765 6 86 6 626 5 4 2 5 7 5 9 67 2 2000 406 1 2 855 1 89 7 630 3 3 9 3 6 7 8 68 4 2001 423 4 2 916 7 87 4 602 0 3 7 4 4 7 8 72 2 2002 443 4 2 995 0 87 9 593 9 2 4 3 5 8 3 67 6 2003 473 5 3 119 8 101 1 666 1 5 6 3 1 8 3 62 7 2004 522 6 3 376 5 118 8 767 8 7 7 4 6 7 7 56 3 2005 587 3 3 722 9 132 8 842 0 7 5 9 3 7 7 52 3 2006 640 6 3 986 8 154 5 961 4 5 6 7 9 6 2 48 4 2007 694 4 4 244 6 171 5 1 048 4 5 5 7 8 5 2 47 1 2008 743 0 4 362 9 191 4 1 124 0 5 0 12 0 5 2 51 9 2009 750 5 4 314 4 189 0 1 186 5 0 4 19 6 5 5 52 8 2010 779 1 4 386 4 199 4 1 122 7 2 6 10 1 6 0 54 5 2011 824 1 4 545 1 240 4 1 325 8 3 6 13 7 6 0 52 8 2012 847 1 4 577 9 252 5 1 364 8 3 8 11 0 6 0 56 7 2013 883 4 4 679 4 260 3 1 378 6 3 7 7 4 6 0 57 9 2014 931 7 4 838 4 275 1 1 428 4 4 1 8 6 6 0 57 1 2015 981 6 4 998 5 304 5 1 550 5 4 1 4 5 5 9 57 0 2016 1 010 7 5 048 9 313 6 1 566 6 4 6 2 9 5 9 60 8 2017 1 058 5 5 159 0 339 2 1 653 4 4 6 4 1 5 8 60 9 2018 1 150 0 5 482 7 356 2 1 698 0 6 1 3 9 5 8 64 8 2019 1 207 1 5 642 1 321 1 1 500 7 3 1 6 7 6 9 77 5 2020 1 211 4 5 550 6 300 4 1 376 5 0 9 10 7 6 6 79 6 2021 1 338 8 6 014 7 348 5 1 565 6 5 8 8 9 6 3 73 5 2022 1 520 0 6 695 3 374 7 1650 3 6 1 12 1 6 2 76 2 2023 1 568 4 6 773 5 340 6 1 471 1 0 5 29 2 8 5 76 6 Stock market Main article Pakistan Stock Exchange Statue of a bull outside the Islamabad Stock Exchange In the first four years of the twenty first century Pakistan s KSE 100 Index was declared the best performing stock market index in the world by the international magazine Business Week 91 43 93 91 citation needed 93 The stock market capitalization of listed companies in Pakistan was valued at 5 937 million in 2005 by the World Bank 91 44 93 On 11 January 2016 with the aim of reducing market fragmentation and creating a strong case for attracting strategic partnerships necessary for providing technological expertise all three stock exchanges including Karachi Stock Exchange Lahore Stock Exchange and Islamabad Stock Exchange were inducted into a unified Pakistan Stock Exchange 91 45 93 In May 2017 the American provider of stock market indexes and analysis tools MSCI confirmed that the Pakistan Stock Exchange PSX had been reclassified from Frontier Markets to Emerging Markets in its semi annual index review 91 46 93 The Pakistan Stock Exchange also successfully navigated through the 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 PSE 100 index continued to climb throughout the year Nearly 40 percent growth in the PSE 100 Index in FY 2021 was driven by the government s large stimulus package the 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 the COVID 19 91 47 93 PSX 100 index growth rate 91 48 93 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 FY 2022 PSX 100 index growth 160 34 1 37 9 10 8 41 7 35 7 28 5 10 4 52 2 41 2 16 0 9 8 23 2 10 0 19 1 1 5 37 6 12 3 The sales of all non financial companies surged to Rs 9 521 billion in the fiscal year 2021 marking a substantial increase of Rs 1 465 billion compared to the preceding year s decline of Rs 807 billion EBIT earnings before interest and tax recorded an increase of Rs 433 billion 53 21 percent YoY growth during FY21 as general administrative and other expenses witnessed a relatively smaller rise in the same period Interest expenses dropped to Rs 224 billion in FY21 from Rs 299 billion in FY20 resulting in a massive YoY increase of Rs 514 billion in profit before taxation Additionally profit after tax of all companies rose by Rs 404 billion posting a YoY growth of 125 06 percent during FY21 over FY20 The net profit margin of all companies jumped to 7 64 in FY21 from 4 01 in FY20 primarily due to exceptional improvement in private sector companies net profit margin Return on assets ROA and return on equity ROE of all companies rose to 6 37 percent and 17 93 percent in FY21 compared to 3 10 percent and 8 91 percent in the preceding year Private sector companies were the prime contributors to the improvement of ROA and ROE with public sector companies contributing marginally The key statistics of all public and private non financial companies listed at the Pakistan Stock Exchange are provided in the following table 91 49 93 Financial Analysis of Companies Non Financial Billion Rupees List 2016 2017 2018 2019 2020 2021 Total Assets 6 781 7 672 8 845 10 131 10 712 12 143 Total Liabilities 4 024 4 646 5 598 6 628 6 955 7 780 Shareholders Equity 2 757 3 025 3 247 3 503 3 756 4 363 Total Sales 5 504 6 405 7 702 8 863 8 056 9 521 Profit Before Tax 498 606 613 612 482 996 Profit After Tax 361 435 431 412 323 728 Net Profit Margin 6 55 6 79 5 59 4 65 4 01 7 64 Return on Assets 0 84 0 89 0 93 0 93 0 77 0 83 Return on Equity 13 77 15 03 13 76 12 20 8 91 17 93 earnings per share 3 91 4 49 4 47 4 17 3 18 6 87 Middle class See also Labour force of Pakistan The Dawood Centre in Karachi M T Khan Road As of 2017 91 update 93 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 91 50 93 Official figures also show that the proportion of households that own a motorcycle and washing machines has grown impressively over the past 15 years 91 51 93 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 recorded at Rs 179 billion during FY 2022 Auto finance continued to be the dominant segment followed by house building which showed remarkable growth after the Mera Pakistan Mera Ghar scheme initiated by the State Bank of Pakistan in December 2020 Under the scheme 100 billion rupees have been disbursed by the banks until June 30 2022 The total amount approved by banks reached Rs 236 billion while the requested amount crossed half a trillion rupees 91 50 93 91 52 93 Poverty alleviation expenditures Main article Poverty in Pakistan The Pakistan government spent over 1 trillion rupees about 16 7 billion on poverty alleviation programs during the past four years reducing poverty from 35 in 2000 01 to 29 3 in 2013 and further to 17 in 2015 91 53 93 Rural poverty remains a pressing issue as development in those areas has been significantly slower than in major urban areas Employment The high population growth in the past few decades has led to a significant number of young people entering the labor market Although Pakistan is among the six most populous Asian nations excessive red tape in the past made firing from jobs and consequently hiring difficult 91 54 93 Significant progress in taxation and business reforms has ensured that many firms are no longer compelled to operate in the underground economy 91 55 93 Government revenues and expenditures Main article Taxation in Pakistan Clifton in Karachi 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 Pakistan s fiscal landscape is characterized by a dynamic interplay between revenues and expenditures shaping the nation s economic trajectory The government s revenue streams primarily stem from two sources taxation and non tax revenue Taxation which includes income tax sales tax and customs duties constitutes a substantial portion of revenues bolstering both federal and provincial government finances Non tax revenue sources such as mark up from state enterprises surplus profits from the State Bank of Pakistan and royalties on oil and gas further contribute significantly to the fiscal framework Conversely government expenditures are strategically allocated across multiple sectors including defense social services infrastructure development and debt servicing Current expenditures covering operational costs interest payments pensions and other obligations are carefully balanced against development expenditures aimed at fostering long term growth and progress The challenge of achieving equilibrium between revenue generation and expenditure allocation leads to budgetary deficits that can necessitate borrowing to bridge the gap The data has been sourced from the Ministry of Finance 91 56 93 Consolidated Federal and Provincial Fiscal Operations Amounts in billion PKR List 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 FY 2022 FY 2023 Total Revenue 1 499 1 851 2 078 2 253 2 567 2 982 3 637 3 931 4 447 4 937 5 228 4 901 6 272 6 903 8 035 9 634 Tax Revenue 1 065 1 317 1 473 1 699 2 053 2 199 2 565 3 018 3 660 3 969 4 467 4 473 4 748 5 272 6 755 7 819 FBR Taxes 1 008 1 161 1 327 1 558 1 883 1 946 2 255 2 590 3 113 3 368 3 842 3 830 3 998 4 764 6 143 7 169 Total Expenditure 2 277 2 531 3 007 3 447 3 936 4 816 5 026 5 388 5 796 6 801 7 488 8 346 9 649 10 307 13 295 16 155 Fiscal Deficit 777 680 929 1 194 1 370 1 834 1 389 1 457 1 349 1 864 2 260 3 445 3 376 3 403 5 260 6 521 As 160 of GDP Total Revenue 14 1 14 0 14 0 12 3 12 8 13 3 14 5 14 3 13 6 13 9 13 3 11 2 13 2 12 4 12 0 11 4 Tax Revenue 9 9 9 1 9 9 9 3 10 2 9 8 10 2 11 0 10 4 10 4 10 8 9 7 9 3 9 4 10 1 9 2 Total Expenditure 21 4 19 2 20 2 18 9 21 4 21 5 20 0 19 6 17 7 19 1 19 1 19 1 20 3 18 5 19 9 19 1 Fiscal Deficit 7 3 5 2 6 2 6 5 8 8 8 2 5 5 5 3 4 1 5 2 5 8 7 9 7 1 6 1 7 9 7 7 Currency system Main article Pakistani rupee Rupee Pakistani Rupee banknotes The basic unit of currency is the rupee ISO code PKR and abbreviated Rs which is divided into 100 paisas Currently the 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 91 57 93 91 58 93 91 59 93 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 and many of the industries built by his predecessor suffered 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 stabilized by lowering interest rates and buying dollars in order to preserve the country s export competitiveness US to PKR average exchange rates 91 60 93 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 62 55 78 50 83 80 85 50 89 23 96 73 102 86 101 29 104 23 104 70 109 84 136 09 158 02 160 02 177 45 248 04 Foreign exchange reserves Pakistan maintains foreign reserves with the State Bank of Pakistan The currency of the reserves was solely the 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 the 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 the State Bank of Pakistan reported that the country s foreign exchange reserves had gone down by 571 9 million to 7 749 7 million 91 61 93 The foreign exchange reserves had declined by more than 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 91 62 93 Amounts in Billion US dollars 91 63 93 91 64 93 List 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 Jun 2022 Jun 2023 Total Reserves 11 4 12 4 16 8 18 2 15 3 11 0 14 1 18 7 23 1 21 4 16 4 14 5 18 9 24 4 15 5 9 2 SBP Reserves 8 6 9 1 13 0 14 8 10 8 6 0 9 1 13 5 18 1 16 1 9 8 7 3 12 1 17 3 9 9 4 5 Banks Reserves 2 8 3 3 3 8 3 5 4 5 5 0 5 0 5 2 5 0 5 3 6 6 7 2 6 8 7 1 5 6 4 7 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 160 in GDP at constant basic prices 91 65 93 Sectors FY 2000 FY 2005 FY 2010 FY 2015 FY 2020 FY 2023 Agricultural 31 75 28 15 25 89 24 83 23 53 22 91 Industrial 16 73 19 01 19 04 19 11 18 53 18 47 Services 51 52 52 84 55 07 56 06 57 94 58 61 Major sectors Agriculture Main article Agriculture in Pakistan See also Rice production in Pakistan Yellow and green fields in Punjab The majority of the population directly or indirectly is dependent on this sector contributing about 23 0 of the gross domestic product GDP and accounting for 37 4 of the employed labor force in 2021 It is the largest source of foreign exchange earnings 91 66 93 The most important crops are wheat sugarcane cotton and rice accounting 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 91 67 93 In the previous market year of 2018 19 Pakistan exported a record 4 5 million tonnes of rice compared to around 4 MMT during the corresponding period in the previous year 91 68 93 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 91 69 93 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 oilseed production play a central role in the government s economic reform package growth 91 48 93 91 70 93 91 71 93 List 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 FY 2022 Agriculture sector 0 81 3 41 0 31 2 71 3 23 3 14 2 42 1 78 0 41 2 22 3 88 0 94 3 91 3 52 4 27 Production of Important Crops Million Tonnes Wheat 20 9 24 0 23 3 25 2 23 5 24 2 26 0 25 1 25 6 26 7 25 1 24 3 25 2 27 5 26 4 Rice 5 6 6 9 6 9 4 8 6 2 5 6 6 8 7 0 6 8 6 8 7 5 7 2 7 4 8 4 9 3 Sugarcane 63 9 50 0 49 4 55 3 58 4 63 8 67 5 62 8 65 5 75 5 83 3 67 2 66 4 81 0 88 7 Cotton 11 7 11 8 12 9 11 5 13 6 13 0 12 8 14 0 9 9 10 7 11 9 9 9 9 1 7 1 8 3 Maize 3 6 3 6 3 3 3 7 4 3 4 2 5 0 4 9 5 3 6 1 5 9 6 8 7 9 8 9 9 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 the agriculture sector through the provision of financial services and technical expertise Industry Main article Industry of Pakistan Factory in Pakistan Pakistan s industrial sector accounts for approximately 19 12 of GDP 91 65 93 In 2021 it recorded a growth of 7 81 compared to the negative 5 75 in 2020 91 70 93 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 the Pakistani economy 91 72 93 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 to the total GDP of Pakistan According to SMEDA and Economic survey reports the share in the annual GDP is 40 with SMEs generating significant employment opportunities for skilled workers and entrepreneurs Small and medium scale firms represent nearly 90 of all enterprises in Pakistan and employ 80 of the non agricultural labor force These figures indicate the potential and further growth in this sector growth 91 70 93 List 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 FY 2022 Industrial sector 8 78 4 15 3 95 4 87 2 33 1 16 4 34 5 40 6 01 4 61 9 18 0 25 5 75 8 20 6 83 Manufacturing 6 14 3 94 1 73 2 61 2 01 5 37 5 76 4 12 4 03 4 87 7 08 4 52 7 80 10 52 10 86 Mining 3 70 1 04 2 42 4 04 5 26 1 77 1 02 3 95 5 64 0 89 7 26 0 54 7 17 1 72 7 00 Construction 13 37 6 70 7 27 7 97 2 17 5 40 3 19 8 33 14 37 10 20 19 55 18 14 3 08 2 39 1 90 Manufacturing It is the largest of Pakistan s industrial sectors accounting for approximately 12 13 of GDP 91 73 93 The manufacturing sub sector is further divided into three components large scale manufacturing LSM with a share of 79 6 in the manufacturing sector small scale manufacturing with a share of 13 8 in the manufacturing sector while slaughtering contributes 6 5 to manufacturing 91 74 93 Major sectors in industries include cement fertiliser edible oil sugar steel tobacco chemicals machinery food processing and medical instruments primarily surgical 91 75 93 91 76 93 91 77 93 Pakistan is one of the largest manufacturers and exporters of surgical instruments 91 78 93 91 79 93 Production of Selected Manufactured Goods 91 80 93 Manufactured Goods Unit of quantity 2016 2017 2018 2019 2020 2021 2022 2023 Cotton Yarn Metric Tonne 000 3 406 3 428 3 430 3 431 3 060 3 442 3 459 2 695 Jute Goods 55 60 74 67 65 70 58 63 Cooking Oil 380 390 391 406 442 460 510 567 Sugar 5 115 7 049 6 566 5 260 4 881 5 694 7 921 6 709 Cement 35 432 37 022 41 148 39 924 39 121 49 797 48 011 41 448 Paper amp Board 610 669 731 704 707 730 825 792 Caustic Soda 225 224 270 247 342 394 405 476 Hydrogen Chloride 172 177 251 425 361 417 510 525 Sulphuric Acid 75 56 49 49 40 72 111 71 Vegetable Ghee Liters 000 1 241 1 280 1 347 1 392 1 454 1 455 1 393 1 554 Cotton Cloth Million Meters 1 039 1 043 1 044 1 046 935 1 048 1 051 921 Cigarettes Billion Numbers 54 34 59 61 46 52 60 43 Nitrogenous Fertilizers NT 000 3 018 3 063 2 758 2 990 3 139 3 324 3 391 3 163 Phosphatic Fertilizers 664 683 619 633 631 748 804 616 Cycle Tyres amp Tubes Numbers 000 11 490 11 507 11 470 14 491 13 496 10 314 10 876 10 702 Motor Tyres amp Tubes 34 202 34 345 35 057 36 321 35 678 img s, wikipedia, wiki, book, books, library,

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