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International trade and Pakistan

By: Irfan Khan

MS Political Science 1st Semester.

Introduction to Economy of PakistanPakistan is a developing countryThe Economy of Pakistan is the 26th largest in the World in terms of Purchasing Power Parity (ppp) and 44th Largest in terms of Nominal Grass Domestic Product even though the Country is 6th most populous in the WorldGDP per capita is $3,149 ranking 140th in the WorldEconomy is semi-industrialized.

Brief HistoryNo industrial bas Agricultural economy Capital problemsDevelopment decade 1960s1971 WarNationalizationPrivatization Afghan warNuclear 9/11War on terror Currant phase

GDP growth in the past1960s 6.81970s 4.81980s 6.51990s 4.6 2000 to 2007 average 7%

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Drivers of Economic GrowthConsumption Oriented EconomyInvestment Oriented EconomyExport Oriented Economy

Overview of the Economy

1. GDP = 5.1 as against 4.14 in 2013-14.2. GDP Per Capita = 1,386$ as against $1,339 in 2013.3. GDP contribution by SectorAgriculture : 21,0%Industry 20.8%(Manufacturing13.5, other Industries 7.3%)Services: 58.1% (2013-14 est)4.Inflation: 8.6% against 12%.5. FBR Revenue 1,955 billion (pkr)6. Fiscal Deficit 5.8%.

Main IndustriesTextile and apparel, food processing, pharmaceuticals, construction materials, chemicals, cement, mining machinery, steel, engineering, software and hardware, automobiles, motor cycle and auto parts, electronics, paper products, fertilizer, shrimp, defense products, ship building.

Agriculture Sector1. Sub SectorsCropsLivestockForestryFisheries2. Contribution to GDP21.0%3. Growth2.1% against 2.9%

Industrial SectorGrowth Rate 5.6% compare to 1.4% in 2013-14Sub sectorsManufacturingConstructionMiningElectricity generation, Distribution and gas distribution.ServicesContribution to GDP 20.8 %Growth recorded 5.8 against 1.4 last year,which is highest since 2008-9

Investment and SavingsFDI $750% million Total foreign investment $2979 million 133.3 pc higher to last yearForeign Remittances $12,895million.pak ranked 7th in the world,2nd after India in South AsiaPublic and Private Investment (public inv growth 17%)Fiscal DevelopmentIncrease in Tax collection 1,744.8billion(Rs)15%growthFDIRemittances Foreign Reserves etc (16)Money and CreditCapital MarketKSE from 2100 to 3100Confidence of InvestorsIndustrial GrowthRemittancesSingle digit InflationPerformance of Banks

Inflation (8.7%)Single digitDecrease in oil pricesLow level of barrowings by govSmooth supply of essential itemsTightening the supply of moneyTrade and PaymentsPublic Debt

ContinuePopulation, Labor force and EmploymentTransport and CommunicationEnergy

PopulationLabor ForceEmployment186 Million59.74 Million (2012-13)Agriculture 49.1%Below Poverty Line 12.4%Construction 15.2%Manufacturing 13.3%Wholesale and Retail 9.2% Transport and Communication 7.3%Unemployment 6.6%

External TradeExports$25.05 billion (2013 est.) TixtileLinens (10%)Cotton and Yarn (9.2%)Rice (7.9%)2. Export goodsNon-Knit Men's Suits (4.3%)Refined Petroleum (3.2%)Cement (2.3%)

Main Export PartnersTotal Exports 190961 PKR (2015)

ContinueUSA 13.6 pcChina 11 pcUAE 8.5 pcKSA 8.5 pcMalaysia, EU, Sri Lanka, Germany etcMain import partners

ContinueTotal imports 339123.00PKRChina 19.7 pcUAE 12.1 pcKSA 12 pcUSA 3.2 pcIndonesiaEU

Factors that Contributed to GrowthStabilityConfidence of InvestorsPak-China free Trade agreementGSP+Payment of circular debt (electric city)Exchange rate stabilityDeregulation3G/4GEuro bondsIncrease in remittancesBalance of payments or Fiscal deficit decreaseIncrease Trade with AfghanistanIMF confidence on Pakistan Economy (SP)Reforms (Privatization.) etc

Public debt$15,534 billion (march 2014)External debt $61.8 billion of which public debt were $47.8 billion New loan by IMF on 27mar 2015 $501.4million after 6th review

Future planing

TAPI

Contribution of different Sectors to GDP

GDP Growth (%)

Per Capita Income ($)

Saving Investment Gap (% of GDP)

Comparative Real GDP Growth Rates (%)

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Growth Rate (%)

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Sectoral Contribution to the GDP Growth (points)

Composition of GDP Growth

Sectoral Share in Gross Domestic Product

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Structure of Saving and Investment (As Percent of GDP)

Country Wise Workers Remittances

ConclusionPakistans economic history is full of fluctuations But we did not concentrate on core issues of economyNow Pak need political consistency, peace, eradication of core problems i.e energy crises . Now Economy is doing will