At the end of 2015, the Pakistani economy showed resilient strength in a region that is partly overshadowed with conflicts and economic uncertainty. The country was able to cut its deficits in half with a model, which if steadfastly pursued, will set a pace for economic prosperity in the region.
Pakistan is a country in South Asia, sharing borders with India, China, Afghanistan, and Iran. Obviously, it is an important country, being the 7th largest country in the world in terms of population.
What makes the Pakistani economy more relevant and important is its geopolitical and economic position with neighboring countries which are always the center of attention for the world. The spotlight on these nations stems from economic opportunities or regional tensions and war on terrorism.
Pakistani Economy in a Nutshell
Most people around the world don’t really regard Pakistani economy as a progressive and a developing one. The nation is often regarded as the neighbor of Afghanistan having somewhat similar conditions prevailing in both of them. But that is only partly true since the Pakistani economy has begin to show economic strength.
Pakistan is much more than the neighbor of Afghanistan. It is a growing nation with somewhat moderate social society and has all the problems like many other progressive nations, like energy issues and infrastructural problems. But nonetheless Pakistani economy is a nation that is moving forward in terms of its economy success, regardless of the issues with neighbors and terrorism. The Pakistani economy reveals a national brand of economic success.
Some Economic numbers
In the fiscal year 2014-15 the Pakistani economy and overall GDP powered up to 4.2% with its foreign exchange earnings making a record amount of $20 billion, according to State Bank of Pakistan. The fiscal deficit of the country is decreasing on a rather very steep rate of more than 50% percent.
In the year 2013-14 the county’s deficit rose to $2.931 billion but in the 2015 fiscal year were dramatically reduced to $1.364 billion. Exports in this fiscal year was around $23.465 billion whereas the imports recorded $36.676 billion. There is still an opportunity to bridge the gap between imports and exports but recent developments show the Pakistan economy is on the right economic path. In almost two years inflation has dropped from 12% to a low 6%, which is a great indicator for the Pakistani economy and foreseeable development of the country.
The Progressive Pakistan
When we talk about the Pakistani economy, many will be surprised to know that Pakistan’s purchasing power is greater than many developed nations in the world. In the last few years, Pakistani economy did well, considering the fact that some major countries did not do well in the economic sector.
The year 2015 till date, has been reasonably well for Pakistan. The country’s economic indicators, whether macro or micro has been pointing vigorously in a positive direction. Inflation is on a decline. The GDP ratio is at par with the targets set by the government and International Monetary Fund (IMF). Considering few years back when Pakistan was on the brink of getting bankrupt and it was saved by the loans from IMF, this is a forward-looking development for the Pakistani economy.
A new economic development, that has occurred within geopolitical and economic talks more than a year now, is the China-Pakistan Economic Corridor (CPEC), which after completion will cater for 17 percent of the GDP of the country and it is dubbed as the game changer for Pakistan on its economic front.
The total project will be around $45 billion all being invested by China. The CPEC investment will include many power projects, completion of Gwadar Port, making a full road infrastructure for the transit routes, and many more.
In the coming years, most of the economic development in Pakistan is going to circle around the CPEC project and its economic impact both in the country and the region. Nevertheless, CPEC is believed to impact progressively for the future of the Pakistani economy.