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      July 15, 2013



Economy of Pakistan

The economy of Pakistan is 27th largest in the world in terms of purchasing power party and 44th largest in terms of nominal GDP. Pakistan has a semi-industrial economy which mainly encompasses textiles, chemicals, food processing, agriculture and other industries. The economy has suffered in the past from decades of internal political disputes, fast growing population, mixed level of foreign investment and high defense spending in the past at the time of its independence in 1947, Pakistanís average economic growth rate has been higher than the average growth rate of the world economy during the period. Average annual real GDP growth rates were 6.8% in 1960s. 4.8% in 1970s and 6.5% in 1980s.Average annual growth fell to 4.6% in the 1960s with significantly lower growth in the second half of that decade.
During the 1960s Pakistan was seen as a model of economic development around the world and there was much praise for its economic progression. Karachi was seen as an economic role model around the world. Later economic mismanagement in general and fiscally imprudent economic policies in particular caused a large increase in countryís public debt and led to slower growth in 1970s and 1980s.

According to many sources, the Pakistani government has made sustained economic reforms since 2000 and medium term prospects for job creation and poverty reduction are the best in nearly decades. Government revenue have greatly improved in recent year, as a result of economic growth, the tax reforms with a broadening of the tax base and more efficient tax collection as a result of self assessment schemes and corruption controls in the central board of revenue and privatization of public utilities and telecommunications. Pakistan is aggressively cutting tariffs and assisting exports by improving ports, roads, electricity supplies and irrigation projects. Islamabad has doubled development spending from about 2% of GDP in the 1990s to 4% in 2003, a necessary step towards reversing the broad under-development of its social sector.

Altamish Azhar
Institute of Management Sciences Peshawar


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