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Pakistan Economic Growth (2000-2010)

Pakistan Economic Growth (2000-2010)

Pakistan Economic Growth (2000-2010) A: Agriculture: “Agriculture growth rate over the last seven years: Table 1. 1: Agriculture Growth (Percent) Year Agriculture Major Crops Minor Crops Livestock Fishery Forestry 2003? 04 2. 4 1. 7 3. 9 2. 9 2. 0 ? 3. 2 2004? 05 6. 5 17. 7 1. 5 2. 3 0. 6 ? 32. 4 2005? 06 6. ? 3. 9 0. 4 15. 8 20. 8 ? 1. 1 2006? 07 4. 1 7. 7 ? 1. 0 2. 8 15. 4 ? 5. 1 2007? 08 1. 0 ? 6. 4 10. 9 4. 2 9. 2 ? 13. 0 2008? 09 4. 0 7. 3 ? 1. 7 3. 5 2. 3 ? 3. 0 2009? 10 (P) 2. ? 0. 2 ? 1. 2 4. 1 1. 4 2. 2 P= Provisional Source: Federal Bureau of Statistics The average growth rate of agriculture is 3. 7 per year in the last seven years. The high sector instability causes the variation between 6. 5 percent to 1. 0 percent. Major crops contribute in the overall agriculture growth rate dependently. The agriculture growth variation, since 2003-04, is shown in the above table 1. 1. Major crops: The major crops cover the 32. 8 percent of agriculture growth rate.

In 2005-06, 2007-08 and 2009-10 the major crops growth rate is negative but in 2003-04, 2004-05, 2006-07 and in 2008-09 the growth rate was positive. The growth rate of major crops is -2. 0 against the 7. 3 of the last year. Minor crops: Minor crops cover 11. 1 percent of agriculture growth rate. The last two years in 2008-09 and 2009-10 it was -1. 7 and -1. 2. The overall productions of minor crops declined through these years accept 2007-08, which cause the food price inflation. Livestock: The Livestock is the single largest donor which gives 53. 2 percent to overall agriculture growth rate.

The overall growth rate of Livestock is not good in the last years accept 2009-10 which grew by 4. 1 percent in against 3. 5 percent last year. Fishery: The agriculture also depends upon Fishery sector. The Fishery growth rate was good in 2005-06 and 2006-07 and after that the growth rate of Fishery is decreasing continuously till now. Forestry: Forestry is also an important fuel of agriculture. The forestry overall growth rate is negative especially in 2004-05. In this year the rate was -32. 4 percent by huge deforestation but the rate of this year is positive of 2. 2 percent against last year of -3. 0.

The overall performance of agriculture sector growth rate was weaker of 2. 0 percent than estimated 4. 0 percent. ” (1) B: Industry: “Pakistan’s economy is semi-industrialized which covers 24. 3 percent of the total GDP. The country’s industrial sector constitutes 24. 3% of the country’s gross domestic product. Pakistan has 55. 88 million of the total labor force according to 2009 survey. The Pakistan industrial growth rate in 2004 and 2006 although there was shortage of electricity and other terrorism situation in the country. Only 2. 5 percent of the total GDP is constituted by the foreign investment.

The major industry sectors of Pakistan are as follow: Textiles: Pakistan has vast textile industry due to the major production of cotton. It provides the 40 percent employment to labor force of the country and 6. 2 million people employing directly and indirectly. The textile earns 65% foreign exchange of the total exports of the country. The textile export is one of the major exports of Pakistan which was $10. 5 billion in 2007 and expected to reach $14 billion this year. Mining: Pakistan has a variety of metallic and non-metallic mineral deposits which makes about 6,00,000 km2 making huge mineral resources.

The first National Mining Policy (NMP) made by Pakistan in 1995 expends the Mining sector. Four international mining companies set their operations in the country’s mining sector as a result of this policy. Coal, Rock Salt, Construction material, Gold, Gem stones and Dudder Zinc are some of the major natural products of the mining sector. IT industry: Pakistan IT industry grows gradually. In 2007 the software exports grew noticeably, which was estimated at $2. 8 billion due to increase in IT companies to 1306. At that year the Pakistan IT industry featured for the first time in Global Services Location Index (GSLI).

Pakistan was ranked as the 30th best offshoring location in the world and it was improved to 20th position in the world in 2009. ” (2) 2. Manufacturing: “In FY 2002-03, the real growth in manufacturing was 7. 7%. in this year it is improved to 18 percent against the last year. The FBS valued the large scale manufacturing at Rs 981,518 million in 2005, registering over 138 percent growth since 2000, while the small scale manufacturing was valued at Rs 356,835 million in 2005 and registering 80 percent growth since 2000. There are the names of industries that plays role in the total GDP of Pakistan.

These are: Automobile Industry: Due to increase in technological advancement of industry, the growth rate/production rises to 90 percent during the last three years. It employs 120,000 people, contributing Rs 12 billion to the GDP and contributes more than Rs 30 billion to the nation exchequer in term of duties and taxes and attracts a substantial investment of Rs. 52 billion. Cement Industry: Pakistan has 3 percent of the highest growth rate in the world, which prompt a sizeable demand for housing facilities in the country. According to the construction industry, there are 6. 5 million housing units. There are 25 large and small scales cement manufacturing industries in Pakistan. They produce ordinary Grey Portland, White, Slag, and Sulphate resistant varieties of cement. Due to producing homogenous product their structure is oligopolistic. Engineering Industry: There 8 large-scale, 50 medium-scale and 450 small-scale fan manufacturing units in Pakistan. 200-300 skilled worker opportunities are provided by large scale and 60-80 opportunities are provided by middle scale and 20-25 opportunities are provided by small scale.

There is 1000 wholesaler doing business in this industry. Pharmaceutical Industry: There are 400 pharmaceutical industries in Pakistan consists of 25 multinationals companies. The demand of finished medicine of the country is about 70 percent. Oil and Gas Industry: The oil reserves in Pakistan are proven to 300 million barrels in 2006. The 2010 estimate 100,000 barrels per day but can’t prove and can produce 58,000 barrels per day of crude oil. According to 2008 British Petroleum Statistical Energy Survey, the average consumption is 362. 8 thousand barrels per day. Chemical Industry: The Chemical industry plays an important role in global business and its output is $1,000 billion as compare to the automobile and engineering international industries. Fashion Industry: The Pakistan Fashion industry’s growth rate is good in the last year. The social, political, economic, technological or even competitive sources are the main drivers for this industry. ” (3) “Food and Beverages Industry: The growth rate of food and beverages industry is 7. 46 percent per year.

The most rapidly growing items are dairy products, processed fish, bakery items, sugar, biscuits and confectioneries, fruit juices and other soft beverages. Rapid export growth has been made in fish preparation, fruit preserves, dry fruits, some beverages and sugar, and honey preparation. Energy Industry: All types of minerals and natural deposits are God gifted to Pakistan, in which some has either been or are yet to be discovered. However, the production from these natural deposits is very low. Construction Industry: The main thing for the construction industry was domestic cement send out, which fell from 22. million tons in Financial Year 2008 to 19. 4 million tons in Financial Year 2009. Iron and steel production turn down from 8. 238 million tons in Financial Year 2008 to 5. 975 million tons in Financial Year 2009. Import of iron and steel dropped from 2. 22 million tons to 2. 04 million tons. Foreign direct investment in this sector took a deep force, going down from $193. 2 million to $130. 4 million. Sugar Industry in Pakistan: The sugar is also a big industrial sector in Pakistan, whose total production of over 3. 65 MMT during the year 2009-10. Pakistan’s 2009-10 sugar production is predict at 3. 5 million tons up about three per cent from the current year estimate of 3. 56 million tons, according to the USDA Foreign Agricultural Service. Consumption is estimated at 4. 35 million tons and imports at 730,000 tons. ” (4) C: Services Sector: “Pakistan service sector covers about 53. 3% of GDP. 24% of this sector is covered by Transport, storage, communications, finance, and insurance. The wholesale and retail trade about 30%. Pakistan is trying to promote the information industry and other modern service industries through encouragement such as long-term tax holidays.

The government is intensely conscious of the enormous job growth opportunities in service sector and has launched aggressive privatization of telecommunications, utilities and banking despite union unrest. Some of the Services sectors of Pakistan are as: Telecommunication: The contribution of the telecom sector to the national level increased to Rs 110 billion in the end of year 2007-08 on account of the general sales tax, activation charges and other steps as compared to Rs 100 billion in the end of year 2006-07.

Pakistan Telecommunication Company Ltd has appeared as a successful Forbes 2000 multinational with over US $1 billion with deal in 2005. The mobile telephone market has exploded by 91 million users in 2008. The Federal Bureau of Statistics provisionally valued this sector at Rs. 185, 376 million in 2005 thus registering over 49% growth since 2000. Railways: A massive analysis plan attracts $1 billion over five years for Pakistan Railways has been announced by the government in 2005. A new rail link trial has been established from Islamabad-Pakistan via Tehran-Iran via Istanbul-Turkey.

This rail link trail would promote trade, tourism, and would also serve as an effective link for the exports to Europe. Wholesale and retail trade: The Federal Bureau of Statistics provisionally valued this sector at Rs. 1, 358,309 million in 2005 thus registering over 96% growth since 2000. Finance and insurance: Pakistan has been ranked 34 out of 52 countries in the World Economic Forum’s first Financial Development Report, which was released in Pakistan through the Competitiveness Support Fund (CSF) in December, 2008.

Pakistan ranked in Policies and Institutions pillar, 49th in institutional environment, 50th in business environment and 37th in Financial Stability. In the Financial Intermediation Pillar Pakistan ranks 25th in banks, 42nd in non banks and 17th in Financial Markets. The Federal Bureau of Statistics provisionally valued this sector at Rs. 311, 741 million in 2005 thus registering over 166% growth since 2000. Pakistan’s banking sector: In 2008–09 the world financial crisis Pakistan’s banking sector has remained really strong and flexible. Banking sector of Pakistan become profitable in 2002.

Their profits continued to rise for the next five years and peaked to Rs 84. 1 billion in 2006. Ownership of dwellings: The Karachi Chamber of Commerce and Industry estimated in 2006 that the overall production of housing units in Pakistan has to be increased to 0. 5 million units per annum. The Federal Bureau of Statistics provisionally valued this sector at Rs. 185, 376 million in 2005 thus record over 49% growth since 2000. Public administration and defense: The Federal Bureau of Statistics provisionally valued this sector at Rs. 389, 545 million in 2005 thus registering over 65% growth since 2000. Social, community and personal services:

The Federal Bureau of Statistics provisionally valued this sector at Rs. 631,229 million in 2005 thus registering over 78% growth since 2000. ” (5) D: Pakistan Trade, Exports and Imports: The low demand of Pakistan exports is suffering its international trade from huge amount of deficit. The political instability is also effect the trade. The trade deficit stood at $9. 7 billion in FY 2007 and rose to $15 billion in FY 2008. Pakistan is a member of several international organizations such as ASEAN, ECO, SAFTA, WIPO and WTO. Steps have been taken to liberalize the trade and investment regimes of the country.

Due to increasing current account deficit, the trade gap range of maximum tariffs was raised from 20%-25% to the 30%-35% on 300 luxury items by Pakistani government in the 2008-09 budget. The total exports fell from $21. 09 billion in 2008 to $17. 87 billion 2009. The total imports also reduced from $38. 19 billion in 2008 to $28. 31 billion in 2009. The major import commodities of Pakistan are: Petroleum, Petroleum products, Machinery, Plastics, Transportation equipment, Edible oils, Paper and paperboard, Iron and steel and Tea.

The major export commodities of Pakistan are: Textiles (garments, bed linen, cotton cloth, and yarn), Rice, Leather goods, Sports goods, Chemicals, Manufactures and Carpets and rugs. ” (6) “From the Gross domestic product purchasing power parity, we can examine the Economic growth of Pakistan, which was estimated to be $454. 2 billion in 2008. Official exchange rate was approximately $160. 9 billion, while real growth rate in 2008 GDP of Pakistan, as per statistical data was found to be 4. 7 percent.

GDP per capita income was $2,600 in 2008. Each sector contributes individual amounts to economy for economic growth of Pakistan, and in that way adding to GDP. Agricultural sector contributes about 20. 4 percent to Pakistan GDP. 26. 6 percent is added by industrial sector as was estimated by 2008. 53 percent was received from service sectors during 2008. According to Pakistan economic data in fiscal 2008 foreign exchange and gold reserves of Pakistan amounted to $9. 104 billion. It had external debt worth $43. 23 billion at that same time. In 2008 foreign investment worth $25. 31 billion was made in Pakistan. References: 1. http://finance. gov. pk/survey/chapter_10/02_Agriculture. pdf 2. http://www. pakgateway. com/industry/industries-of-pakistan-i. html 3. http://www. pakgateway. com/industry/industries-of-pakistan-ii. html 4. http://www. pakgateway. com/industry/industries-of-pakistan-iii. html 5. http://en. wikipedia. org/wiki/Economy_of_Pakistan#Services 6. http://www. economywatch. com/world_economy/pakistan/export-import. html 7. http://www. economywatch. com/economic-growth/pakistan. html (By Jamshed Ahmed, Student at Forman Christian College Lahore, Pakistan (2009-2013)):-