Pakistan: Economic Contexts Overview

[Note: This information derives primarily from the 1995 edition of the CIA World Factbook.]

Overview

The Pakistani economy has made progress in several key areas since Benazir BHUTTO became Prime Minister in October 1993. She has been under pressure from international donors and the IMF - which gave Pakistan a $1.3 billion structural adjustment credit in February 1994 - to continue the economic reforms and austerity measures begun by her predecessor, caretaker Prime Minister Moeen QURESHI (July-October 1993). Foreign exchange reserves climbed to more than $3 billion in 1994, and the budget deficit was substantially reduced. Real GDP growth was 4% in FY93/94, up from 2.3% in FY92/93. Foreign direct and portfolio investment also have increased. Privatization of large public sector utilities began in 1994 with the sale of 12% of the Pakistan Telecommunications Corporation (PTC) and the Water and Power Development Authority (WAPDA); the sale of state-owned banks and other large units are planned for 1995. Still, the government must cope with long-standing economic vulnerabilities - high levels of debt service and defense spending, a small tax base, a huge population, and dependence on cotton-based exports - which hamper its ability to create a stable economic environment. In addition, Pakistan's infrastructure is inadequate and deteriorating, low levels of literacy constrain industrial growth, and increasing sectarian, ethnic, and tribal violence disrupt production.

General Information

National product: GDP - purchasing power parity - $248.5 billion (1994 est.)
National product real growth rate: 4% (1994 est.)
National product per capita: $1,930 (1994 est.)
Inflation rate (consumer prices): 12% (FY93/94)
Unemployment rate: 10% (FY90/91 est.)
Budget:

revenues: $10.5 billion
expenditures: $11.2 billion, including capital expenditures of $3.1 billion (FY93/94)
Currency: 1 Pakistani rupee (PRe) = 100 paisa
Exchange rates: Pakistani rupees (PRs) per US$1 - 30.860 (January 1995), 30.570 (1994), 28.107 (1993), 25.083 (1992), 23.801 (1991), 21.707 (1990)
Fiscal year: 1 July - 30 June

Foreign Trade

Exports: $6.7 billion (1993)
- commodities: cotton, textiles, clothing, rice, leather, carpets
- partners: US, Japan, Hong Kong, Germany, UK, UAE, France

Imports: $9.5 billion (1993)
- commodities: petroleum, petroleum products, machinery, transportation equipment, vegetable oils, animal fats, chemicals
- partners: Japan, US, Germany, UK, Saudi Arabia, Malaysia, South Korea
External debt: $24 billion (1993 est.)

Industrial production

Growth rate 5.6% (FY93/94); accounts for 18% of GDP
Electricity:
- capacity: 10,800,000 kW (1994)
- production: 52.4 billion kWh
- consumption per capita: 389 kWh (1993)
Industries: textiles, food processing, beverages, construction materials, clothing, paper products, shrimp

Agriculture:

24% of GDP
world's largest contiguous irrigation system
major crops -- cotton, wheat, rice, sugarcane, fruits, vegetables;
livestock products -- milk, beef, mutton, eggs

Illicit drugs

major illicit producer of opium and hashish for the international drug
trade
remains world's third largest opium producer (160 metric tons in
1994)
major center for processing Afghan heroin and key transit area for
Southwest Asian heroin moving to Western market

Economic aid:

recipient: $2.5 billion (FY91/92); $2.5 billion (FY92/93); $2.5 billion (FY93/94); no US commitments, includes bi- and multilateral aid