Pakistan has seen economic growth of almost five percent
per year between 2015 and 2017. Gross domestic product (GDP)
in 2017 was US $ 305 billion (USD), while GDP per capita in
the same year was US $ 5,400.
COUNTRYAAH, Pakistan faces major economic challenges. The scope of
foreign investment is small, partly due to weak political
stability, a failing energy supply and a high security risk
for personnel and installations. The absence of economic
reforms and weak tax revenues also generally contribute to
low public budgets.
For generations, Pakistan's economy has been based on
agriculture, which despite a more diverse economic structure
in the country, still accounts for about one-fifth of the
country's national budget and employs about one-third of the
working population. The industry accounts for well over a
quarter of the national product, and employs close to 20
percent of people in work. A rich supply of water from the
Himalayas provides the basis for hydropower- based energy,
and in addition to large power plants, smaller local power
plants have been developed in recent years - especially in
the north. Baluchistan has viable deposits of natural gas,
while oil is extracted in Sindh, among others.
Between 1965 and 1980, Pakistan had an average economic
growth of 5 per cent annually, and during the 1980s it
remained at around 6 per cent. In the period 1990–2003,
there was an average GDP growth of 3.9 per cent. Following
transient negative growth at the turn of the millennium,
growth was very strong in the following years, reaching 8.4
per cent in 2004-2005, according to estimates from the
International Monetary Fund (IMF). Despite this, almost 30
percent of the population lives in poverty (2013). This is
partly due to the large population growth and partly to the
fact that the country's wealth is in relatively few hands.
Very many feed on a single farm.
In the early 1970s, the authorities nationalized large
parts of the country's industrial enterprises. Later, and
especially from the mid-1980s, it was again opened to
privatization. In the 1990s, Nawaz Sharif's two governments
implemented rapid privatization of state-owned industrial
enterprises. Almost all restrictions on capital movements,
banking establishments and private investments were lifted.
However, economic growth was hampered by weak resource use,
widespread corruption and a highly inefficient tax system.
During the 1990s, poverty became even more widespread,
with infrastructure and social services characterized by
decay. Pervez Musharraf's military-dominated regime has
continued with radical economic reforms since the turn of
the millennium; including the tax system. A comprehensive
poverty reduction program was implemented in the years
2001–2004. The economy has been increasingly open to foreign
investors since the turn of the millennium.
The material damage after an earthquake disaster on
October 8, 2005, was estimated by the World Bank at USD 5
billion. From the world community, a total of USD 6 billion
in aid was subsequently promised.
Tourism is relatively modest. Political turmoil and
competition from more easily accessible neighboring
countries keep tourist visits at a fairly low level. In the
first years after the turn of the millennium, the country
was visited by about half a million foreign tourists
Mining and energy
Mining is mainly state-controlled. More than 3 million
tonnes of coal are extracted (in Baluchistan and Punjab)
annually. However, the coal has low quality. Large deposits
of coal have recently been discovered in the Thar Desert in
Sind. Chromium ore (northeastern Baluchistan), limestone,
petroleum, plaster and iron ore are also extracted. Natural
gas production covers a large part of Pakistan's energy
consumption. From the large field at Sui (near Sukkur) in
Baluchistan, a 560 kilometer long pipeline leads to Karachi
and a 350-kilometer long cord to Multan in Punjab. However,
gas installations have been subject to sabotage by militant
Baluchi nationalists, especially since 2005.
In 2016, the consumption of primary energy was 4
exajoules (EJ), of which 28 per cent was based on imports.
Oil and natural gas are the dominant energy sources with a
share of around 80 per cent. Oil is imported from the Middle
East, especially Saudi Arabia, while some natural gas comes
The final consumption of electrical energy was 109 TWh in
2016. The per capita figure corresponds to around 500 kWh,
but not all are connected to the electricity grid. In 1981,
only about 15 per cent of the villages had access to
electricity, but after Pakistan has invested heavily in the
development of the electricity grid in recent years, now
(2017) a quarter of the population is without electricity.
The main source of energy for the production of
electrical energy is fossil fuel, mainly in the form of oil
and natural gas, to a lesser extent coal. Of a total
production of 123 TWh in 2016, 66 per cent came from thermal
power plants. Other power generation was distributed among
hydropower plants (26 per cent), nuclear power plants (6 per
cent) and wind power plants (2 per cent).
Pakistan, originally with the help of France, was early
in the process of deploying nuclear technology, but has
later faced adversity since they did not sign the
Agriculture, forestry and fishing
Agriculture is the dominant trade route. In 2015, the
industry (including forestry and fishing) employed more than
42 per cent of the working population and in 2016
contributed 19 per cent of GDP. About 25 percent of the
country's total land is cultivated land, of which about 80
percent is dependent on artificial irrigation. From the
Indus and its bees runs a fine mesh of irrigation channels;
of its kind, the world's largest continuous system. The
large use of artificial irrigation has resulted in increased
salt content in the soil, and neglect of the water sources
in some places.
Since the 1960s, there has been an emphasis on increased
mechanization, greater use of artificial fertilizers and the
use of better seed grain to increase agricultural
productivity. Agriculture is mostly run by small landlords/
tenants; 90 per cent is under 10 hectares, and the area
yield is still relatively low. The great landlords have held
to a considerable extent their position as feudal lords;
also with great political influence. Adopted land reforms
have largely become paper products. Horses, oxen and donkeys
still play an important role as a driving force in
agriculture and as a means of transport.
The most important cultural growth is wheat (19 million
tonnes, 2003), rice and sugar for domestic consumption. The
country is self-sufficient with these goods. Cotton and
leather products are very important export goods. Cotton has
traditionally accounted for about half of the export
revenue. Wheat, corn and sugar cane are also important
selling products. Otherwise, fruits and dates (Baluchistan),
millet, oilseeds, beans, tobacco and more are also grown.
Animal husbandry is important in areas without irrigation.
Just under 5 per cent of the country's area is productive
forest. Most of the timber is used for house building and
The fishing industry is important, and has seen strong
growth in recent years. Since the turn of the millennium,
the annual catch volume has been in excess of 600,000
tonnes. 90 percent of the catch is taken in the sea,
especially along the Makran coast (Baluchistan) and along
the coast between Karachi and the border with India.
Pakistan has a small domestic market for fish; 40 per cent
of the catches are ground to fishmeal and used as animal
feed, otherwise most are exported, especially shrimp to
Japan and Singapore. Freshwater fishing has very little and
only local significance.
The industry (including mining) employs 22.6 per cent of
the working population (2015) and contributes 19.1 per cent
of GDP (2016). The industry is growing, and in the period
1990–2002 had an annual growth rate of 4 per cent. In 2017,
the growth rate was 5.4 per cent. The largest industrial
expansion has taken place in Punjab, where new businessmen
have become a new upper class in competition with
traditional landlords. The textile and food industry,
together with the refining of petroleum, are the most
important industries. The cotton industry, with its center
of gravity in Karachi, largely produces textiles and yarns
Pakistan Steel operates a large steel plant outside
Karachi, at Port Bin Qasim. The work was originally
established with Soviet support, and is based on imported
ore and scrap iron. The country is self-sufficient with
paper. The leather goods industry is growing rapidly after
Pakistan has begun to process the leather to a greater
extent rather than exporting unprocessed hides and skins.
The food, rubber and machinery industries and the chemical
and electrical engineering industries are also expanding. A
large part of the production is consumables such as
refrigerators, fans, light bulbs, radio and television sets.
The pharmaceutical industry is largely dominated by
multinational companies. There is also an artisanal
industrial production, especially of ceramics and rugs.
Pakistan has a significant trade deficit and receives
loans and financial assistance from a number of countries
and the World Bank. Contributions from Pakistani workers
abroad make up a large part of the country's foreign
The transfers showed a declining trend in the 1990s, and
were at their lowest with about one billion USD at the turn
of the millennium. Subsequently, transfers increased
sharply, to approximately $ 4 billion in 2003 and 2004.
The main export goods are various cotton goods ($ 6.6
million in 2003) and leather goods (4.8 million). In
2003/2004, oil and petroleum products accounted for 21 per
cent of total imports. Other imports include in particular
machinery and transport equipment, chemicals, iron and steel
products, and semi-finished products for industry. The most
important export markets as of 2017 are the United States
(17.7 percent), the United Kingdom (7.7 percent) and China
(6 percent), while the country imports most from China (27.4
percent), the United Arab Emirates (13.7 percent) and United
States (4.9 percent).
Transport and Communications
The transport network in Pakistan is of a very varied
nature, and is best developed in the north and in a belt
down to Karachi on the coast. Karachi is the country's most
important port city. A new deepwater port was opened in 2005
in Gwadar. There are 11,881 kilometers of railway (2019). A
railway connection to Turkmenistan via Afghanistan is
underway. Over half of the 263,775 kilometers of road
network are paved (2019). In 1978, Karakorum Highway opened,
a road link connecting Xinjiang Province in China. From 1997
there is a highway between Lahore and Islamabad.
In Karachi, the city's own urban train network ('urban
train') was reopened in 2005 after extensive modernization
since 1998. The city has over 15,000 city buses; all
privately owned. Motor rickshaws, three-wheeled scooters
with roofs and doors and imaginative decorations, make their
mark on the traffic in many cities. Tongas, two-wheeled
horse carts, are still in use. International airports can be
found at Karachi, Rawalpindi/Islamabad, Lahore, Peshawar
and Quetta. Four private airlines compete with the 50
percent state-owned Pakistan International Airlines (PIA)
and Shaheen Airlines, operated by the Air Force. PIA has had
direct routes from Gardermoen to Islamabad and Lahore since