Critical Review of Pakistan Economy

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Critical review of Pakistan economy

|Currency |1 Pakistani Rupee (PKR) Rs. = 100 Paisas | |Fiscal year |July 1–June 30 |


|GDP |$170 billion (2008) | |GDP growth |5.8% (2008 est.) | |GDP by sector |Agriculture: 6%, industry: 21%, services: 73% (2008) | |Inflation |10.3% 2007-08 | |Population |23% ((2007)) | |below poverty line | | |Labour force |49.18 million (2006 est.) | |Unemployment |7.5% (2007 est.) | |Main industries |Textiles, chemicals, food processing, steel, transport equipment, | | |automotives, machinery, beverages, construction, materials, | | |clothing, paper products |

|Exports |$19.22 billion (2007-08) | |Export goods |textile goods (garments, bed linen, cotton cloths, and yarn), rice, | | |leather goods, sports goods, chemicals manufactures, carpets and rugs | |Main export |United States 22.4%, UAE 8.3%,UK 6%, China 5.4%, Germany 4.7% (2006 | |partners |est.) | |Imports |$39.96 billion f.o.b. (2007-08) | |Import goods |Petroleum, Petroleum products, Machinery, Plastics, Transportation | | |equipment, Edible oils, Paper and paperboard, Iron and steel, Tea | |Main import |China 14.7%, Saudi Arabia 10.1%, UAE 8.7%, Japan 6.5%, United States | |partners |5.3%, Germany 5%, Kuwait 4.9% (2006 est.) |

he economy of Pakistan is the 26th largest economy in the world in terms of purchasing power.Pakistan's economy mainly encompasses textiles, chemicals, food processing, agriculture and other industries. In 2005, it was the third fastest growing economy in Asia

The economy has suffered in the past from decades of internal political disputes, a fast growing population, mixed levels of foreign investment, and a costly, ongoing confrontation with neighboring India. However, IMF-approved government policies, bolstered by foreign investment and renewed access to global markets, have generated solid macroeconomic recovery the last decade. Substantial macroeconomic reforms since 2000, most notably at privatizing the banking sector have helped the economy.

GDP growth increased by gains in the industrial and service sectors, remained in the 6-8% range in 2004-06. In 2005, the World Bank named Pakistan the top reformer in its region and in the top 10 reformers globally.

Islamabad has steadily raised development spending in recent years, including a 52% real increase in the budget allocation for development in FY07, a necessary step toward reversing the broad underdevelopment of its social sector. The fiscal deficit - the result of chronically low tax collection and increased spending, including reconstruction costs from the devastating Kashmir earthquake in 2005 was manageable.

Inflation remains the biggest threat to the economy, jumping to more than 9% in 2005 before easing to 7.9% in 2006. In 2008, following the surge in global petrol prices inflation in Pakistan has reached as high as 25.0%. The central bank is pursuing tighter monetary policy while trying to preserve growth. Foreign exchange reserves are bolstered by steady worker...
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