Important Sony Store Pakistan Information

Pakistan was a very poor and predominantly agricultural country when it gained independence in 1947. Pakistan's average economic growth rate since independence has been higher than the average growth rate of the world economy during the period. Average annual real GDP growth rates were 6.8% in the 1960s, 4.8% in the 1970s, and 6.5% in the 1980s. Average annual growth fell to 4.6% in the 1990s with significantly lower growth in the second half of that decade.

Industrial-sector growth, including manufacturing, was also above average. In the late 1960s Pakistan was seen as a model of economic development around the world, and there was much praise for its economic progression. Later, economic mismanagement in general, and fiscally imprudent economic policies in particular, caused a large increase in the country's public debt and led to slower growth in the 1990s. Two wars with India in 1965 and 1971 adversely affected economic growth. In particular, the latter war brought the economy close to recession, although economic output rebounded sharply until the nationalizations of the mid-1970s.

Economic resilience

Historically, Pakistan's overall economic output (GDP) has grown every year since a 1951 recession. Despite this record of sustained growth, Pakistan's economy had, until a few years ago, been characterized as unstable and highly vulnerable to external and internal shocks. However, the economy proved to be unexpectedly resilient in the face of multiple adverse events concentrated into an eight-year period —

• the Asian financial crisis;
• economic sanctions — according to Colin Powell, Pakistan was "sanctioned to the eyeballs";
• lop recession;
• severe rioting in the port city of Karachi;
• a severe drought — the worst in Pakistan's history, lasting about four years;
• heightened perceptions of risk as a result of military tensions with India — with as many as 1 million troops on the border, and predictions of impending (potentially nuclear) war;
• the post-9/11 military action in neighboring Afghanistan, with a massive influx of refugees from that country;
• the 2005 Pakistan earthquake

Despite these adverse events, Pakistan's economy kept growing, and economic growth accelerated towards the end of this period. This resilience has led to a change in perceptions of the economy, with leading international institutions such as the IMF, World Bank, and the ADB praising Pakistan's performance in the face of adversity.

Additional confirmation that the country's economy is not as weather-sensitive as had been previously perceived comes from a 2008 analysis that "examined 68 countries, quantifying their sensitivity to fluctuations in weather, using figures on GDP by industry sector and the sensitivity of particular sectors to given weather variables." The analysis found that of the 68 countries, the "least weather-sensitive country was Pakistan."

Recent economic history

Macroeconomic reform and prospects

According to many sources, the Pakistani government has made substantial economic reforms since 2000, and medium-term prospects for job creation and poverty reduction are the best in nearly a decade.

Government revenues have greatly improved in recent years, as a result of economic growth, tax reforms - with a broadening of the tax base, and more efficient tax collection as a result of self-assessment schemes and corruption controls in the Central Board of Revenue - and the privatization of public utilities and telecommunications. Pakistan is aggressively cutting tariffs and assisting exports by improving ports, roads, electricity supplies and irrigation projects. Islamabad has doubled development spending from about 2% of GDP in the 1990s to 4% in 2003, a necessary step towards reversing the broad underdevelopment of its social sector.

Liberalization in the international textile trade has already yielded benefits for Pakistan's exports, and the country also expects to profit from freer trade in agriculture. As a large country, Pakistan hopes to take advantage of significant economies of scale, and to replace China as the largest textile manufacturer as the latter China moves up the value-added chain. These industries play to Pakistan's relative strengths in low labor costs.

Growing stability in the nation's monetary policies has contributed to a reduction in money-market interest rates, and a great expansion in the quantity of credit, changing consumption and investment patterns in the nation. Pakistan's domestic natural gas production, and its significant use of CNG in automobiles, has cushioned the effect of the oil-price shock of 2004-2005. Pakistan is also moving away from the doctrine of import substitution which some developing countries (such as Iran) dogmatically pursued in the twentieth century. The Pakistani government is now pursuing an export-driven model of economic growth successfully implemented by South East Asia and now highly successful in China.

In 2005, the World Bank reported that

In addition, reduced tensions with India and the ongoing peace process raise new hopes for a prosperous and stable South Asia, with more intra-regional trade. However, due to global economic crisis in year 2007-2008 the economic progress has been adveresely affected and unemployment has increased.

President Musharraf led a great team of economists and professionals with ex-PM Shaukat Aziz, to mark their achievements. Their achievements caused Pakistan to emerge as a geo-strategic important country with a 100% better economy..

By October 2007, at the end of Prime Minister Shaukat Aziz’s tenure, Pakistan raised back its Foreign Reserves to a handsome $16.4 billion. His exceptional policies kept our trade deficit controlled at $13 billion, exports boomed to $18 billion, revenue generation increased to become $13 billion and attracted foreign investment of $8.4 billion.

===== PAKISTAN's ECONOMIC COMPARISON 1999 to 2008 =====

Pak Economy in 1999 was: $ 75 billion

Pak Economy in 2007 is: $ 160 billion

Pak Economy in 2008 is: $ 170 billion

GDP Purchasing Power Parity (PPP) in 1999: $ 270 billion

GDP Purchasing Power Parity (PPP) in 2007: $ 475.5 billion

GDP Purchasing Power Parity (PPP) in 2008: $ 504.3 billion

GDP per Capita Income in 1999: $ 450

GDP per Capita Income in 2007: $ 926

GDP per Capita Income in 2008: $1085

Pak revenue collection 1999: Rs. 305 billion

Pak revenue collection 2007: Rs. 708 billion

Pak revenue collection 2008: Rs. 990 billion

Pak Foreign reserves in 1999: $ 1.96 billion

Pak Foreign reserves in 2007: $ 16.4 billion

Pak Foreign reserves in 2008: $ 8.89 billion

Pak Exports in 1999: $ 8 billion

Pak Exports in 2007: $ 18.5 billion

Textile Exports in 1999: $ 5.5 billion

Textile Exports in 2007: $ 11.2 billion

KHI stock exchange 1999: $ 5 billion at 700 points

KHI stock exchange 2007: $ 75 billion at 14,000 points

KHI stock exchange 2008: $ 46 billion at 9,300 points

Foreign Investment in 1999: $ 301 million

Foreign Investment in 2007: $ 8.4 billion

Debt servicing 1999: 65% of GDP

Debt servicing 2007: 28% of GDP

Debt servicing 2008: 27% of GDP

Poverty level in 1999: 34%

Poverty level in 2007: 24%

Literacy rate in 1999: 45%

Literacy rate in 2007: 53%

Pak Development programs 1999: Rs. 80 billion

Pak Development programs 2007: Rs. 520 billion

Pak Development programs 2008: Rs. 549.7 billion

For Complete Sources/Links: Economic Comparison 1999 - 2007 and beyond

The economy today

Stock market

In the first four years of the twenty-first century, Pakistan's KSE 100 Index was the best-performing stock market index in the world as declared by the international magazine “Business Week”. The stock market capitalisation of listed companies in Pakistan was valued at $5,937 million in 2005 by the World Bank. . But in 2008, after the General Elections, uncertain political environment, rising militancy along western borders of the country, and mounting inflation and current account deficits resulted in the steep decline of the Karachi Stock Exchange. As a result, the corporate sector of Pakistan has declined dramatically in significance in recent times.

Manufacturing and finance

Pakistan's manufacturing sector has experienced double-digit growth in recent years, from 2000 to 2007, with Large-scale manufacturing growing from a minimal 1.5% in 1999 to a RECORD 19.9% in 2004-05 and averaged 8.8% by end of 2007.

The Federal Bureau of Statistics valued FINANCE & INSURANCE sector at Rs.311,741 million in 2005 thus registering over 166% growth since 2000. A reduction in the fiscal deficit has resulted in less government borrowing in the domestic money market, lower interest rates, and an expansion in private sector lending to businesses and consumers.

Growing middle class

Measured by purchasing power, Pakistan has a 30 million strong middle class, according to Dr. Ishrat Husain, Ex-Governor (2 December 1999 - 1 December 2005) of the State Bank of Pakistan. It is a figure that correlates with research by Standard Chartered Bank which estimates that Pakistan possesses a "a middle class of 30 million people that Standard Chartered estima