Pakistan: Economic Contexts Overview

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


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

Foreign Trade

Industrial production


Illicit drugs

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

See also

Postcolonial Web India OV Pakistan OV

Last modified 18 May 2001