Nestle Juice

By:

Asher Shafique
Aafia Shahryar
Abdur Rafay
Abdur-Rehman Qureshi
 Nestlé Pakistan
Nestlé touch billions of lives worldwide; from the farmers they work with to the individuals and
families who enjoy their products, the communities where we live and work, and the natural
environment upon which we all depend.

At Nestlé Pakistan, the global ideology of Nutrition, Health and Wellness is inspired by the
scientific breakthrough of our founder, Henri Nestlé and ever since it runs in our DNA. Guided by
our values and with nutrition at our core, we enhance quality of life and contribute to a healthier
future. We are the leading Food & Beverages Company in Pakistan, reaching out to the remotest
areas, offering products and services for all stages of life, every moment of the day. Today more
and more consumers mirror our emphasis on nutrition, as they realize that food choices affect their
health and quality of life.

Nestlé Pakistan is headquartered in Lahore, with four production facilities across the country.
Factories in Sheikhupura and Kabirwala are multi-product, whereas the ones in Islamabad and
Karachi are water factories.

Nestle as brand leader does not feel threatened

History
Nestlé Pakistan Ltd. is a subsidiary of Nestlé, a company based in Vevey, Switzerland. Today, millions of
consumers across Pakistan mirror the emphasis on nutrition, realizing that food choices impact their
health and quality of life. About Nestlé Exchange (PSE), the food processing company has been operating
in Pakistan since 1988 under a joint venture with Milk Pak Ltd, whose management was took over in
1992. For the last several years, Nestlé Pakistan has been consistently placed among the top companies of
the PSE.

Purpose
Nestlé’s purpose is enhancing quality of life and contributing to a healthier future. They want to
help shape a better and healthier world. They also want to inspire people to live healthier lives.
This is how Nestle contribute to society while ensuring the long-term success of company.

Portfolio
Nestlé is the world’s largest food and beverage company. It is present in 191 countries around
the world, and its 328,000 employees are committed to Nestlé’s purpose of enhancing quality of
life and contributing to a healthier future. Nestlé offers a wide portfolio of products and services
for people and their pets throughout their lives. Its more than 2000 brands include local favorites
like NESTLÉ MILKPAK, NESTLÉ PURELIFE and NESTLÉ FRUITA VITALS. Company
performance is driven by its Nutrition, Health and Wellness strategy. Nestlé is based in the Swiss
town of Vevey where it was founded more than 150 years ago.

Nestle Fruita Vitals latest TVC

The legendary Pakistani hero, Shaan Shahid featured in Nestle Fruita Vitals latest TVC which
focuses on the 3 steps to quality verification of the brand.

The beverage brand has taken a different strategy this time around where it has moved towards
the functional benefits of their product, laying emphasis on performing a quality check before
purchasing Nestle’s packaged fruit juices.

It is a great initiative by Nestle since there are various fake products easily available in the
industry. The company is increasing awareness to its consumers on how to differentiate its
original products counterfeit items.

References:
http://www.nestle.pk/brands/juices/nestle_fruitavitals
 Company SWOT Analysis
SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses,
Opportunities, and Threats involved in a project or in a business venture. It involves specifying
the objective of the business venture or project and identifying the internal and external factors
that are favorable and unfavorable to achieving that objective.

STRATEGIC ANALYSIS

INTERNAL EXTERNAL

STRENGTHS WEAKNESS OPPORTUNITIES THREATS

Resolve; Reduce Exploit; Expand
Build; Enhance Avoid; Thwart

This section presents a SWOT analysis to review the micro environment of the firm reflecting
specifically upon the strengths and weaknesses of Nestle Fruita Vitals, and the opportunities and
threats the brand must respond to. A SWOT analysis is often used as a strategic tool to allow a
presentation of the firm’s resources and capabilities, which can be further developed to aid
competitive advantage. A SWOT analysis therefore underpins the development of future
strategic options. A desirable competitive advantage is one obtained through a minimization of
threats aligned with the seizing of opportunities.

Findings from SWOT Analysis:

Nestle Fruita Vitals is a healthy, nutritional drink for a balanced lifestyle which is fun filled,
sweet, and cheerful; brimming with life however in the meantime healthy and fresh. Presently
beverage organizations are excessively competitive so they have to expand their item quality and
variety. They have to provide their products to the consumers at a lower rate than the
competitors. They should also utilize their elite approach at large restaurants, so the trial of that
item is excessively high. They also need to advertise their product more towards targeted
consumers.
 Nestle Fruit Vitals' Strengths (Internal Strategic Factors):
 Great image in the mind of people.
 Good worldwide reputation among customers.
 Nestle Fruita Vitals produces good quality products. It cannot compromise on quality.
The fruit pulps are supplied from around the world which are according to international
quality. They are tested according to international standards.
 Nestle Fruita Vitals has recognized that there is a right time and place for their product;
therefore, their strategy makes room for adjustments.
 Highest market share i.e. 60% in juices market.
 Skilled labor in an increasingly global competitive world is essential and Nestle is
creating competitive edge by its highly skilled labor.
 Nestle Fruita Vital's juices are pure, fresh and healthy.
 Wide range of variety in juices. New flavors also introduced i.e. Mint Margarita & Pina
Colada
 Research and development departments give the brand continuous knowledge about itself
and its competitors. It has a competitive advantage because many local juices have no
research and development department.
 Strong HR department.
 Nestle Fruita Vitals has a strong support from its parent company, which is the world’s
largest processed food and beverage company, with a presence in almost every country.
 Competitive price
 Strong financial position
 Qualified and experienced staff
 Efficient distribution channels
 Highly standardized safety programs
 High ethical values and standard business practices
 Fruit Juice Content in NFV is higher than that in competitiors' juices and above BSTI’s
minimum level.
 Socially responsible
 Innovative

Nestle Fruit Vitals' Weaknesses (Internal Strategic Factors):

 Nestle Fruita Vital's juices cannot be stored for a long time.

 Target market is upper middle and high class because the price of Nestle is not very
economical and income level of Pakistan and most of the people lies in lower middle
class so they cannot afford most of the Nestle products.
 Nestle has to recognize the need for stability and consistency in the processes found
within the company’s global supply chain.
 Nestle Fruita Vitals, being a huge company, is very less proactive to the demands. Unless
competitors initiate a campaign or come up with new strategy, it does not bring changes.
 There are limited distribution channels because they distribute their products to
wholesalers in their own factory vehicles.
 Due to its in-efficient distribution channels, Nestle Fruita Vitals has experienced stock
outs on regular basis. This had adverse effect on company's image and consumer base.
 They don’t have direct outlets.
 Nestle is dependent on Tetra Pak for packaging of its entire dairy products. It is the only
option for them as Tetra pack has monopoly in packaging sector. This causes higher
production costs.
 The company has always reported higher distribution cost. The distribution cost is high as
compared to the competitors in the local market.
 Low shelf life than the competitors' products.
 Transit time is almost 2 months, so actual shelf life will be maximum 4 months
 Few promotional activities
 Lengthy process in taking major decisions
 High maintenance and production cost as it is imported from Pakistan
 Low profit margin

Nestle Fruit Vitals' Opportunities (External Strategic

Factors):
 Development of intangible capabilities to aid competitive advantage. Intangible
capabilities like leadership qualities, tacit knowledge and skills, teamwork, organization
cultures, business processes, partnership, etc. can help Nestle Fruita Vitals in building
competitive edge over its competitors.
 Nestle should work on its distribution channels to make it efficient in order to maintain
supply of their products.
 Extensive awareness programs for health and hygiene has created awareness among
consumers for the benefits of juices.
 Company can open separate stores for eliminating retailers.
 Opportunities to expand products more.
 The income of people is constantly on a rise and they tend to move towards premium
taste.
 Nestle Fruita Vitals can do integration of new acquisitions in growth markets.
 Government is supporting overseas outlay in Pakistan which is a great opportunity for
Nestle to expand its business in Pakistan and to cater large markets.
 Nestle should invest in educating the farmers for best practices and providing them
resources and assistance to create greater value and to ensure high capitalization and
quality.
 Consumers, especially younger generation are hugely influenced by western societies.
This has changed the trends for packed ready to use products. This changing social trend
has created large demand and opportunity to increase market share.
 Pakistan is having favorable conditions for the brand to expand. Most of the time there is
summer,which is favorable for its products.
 Customers in urban areas drink functional drinks on a regular basis as they increasingly
adopt western lifestyles.
 Increasing health and hygiene awareness among Pakistanis has greatly increased the
sales.
 Manufacturing of some products is cheaper in Pakistan than in other South East Asian
countries.
 Juices market expands very fast. A new research proves that in future (2019) every
person will use 125.5 litters juices per year.
 Limited options in locally produced real fruit juices.
 Non-carbonated beverages (Ready to Drink Juices) are growing rapidly. Consumers
prefer non carbonated beverages over cabonated ones.
 Some local competitors have low quality products.

Nestle Fruit Vitals' Threats (External Strategic Factors):

 Higher levels of buyer power within the industry is fueled by greater choice and lower
loyalty. Price factor is also a very important factor, as still consumers prefer fresh juice
as it is cheaper than processed juice. Moreover, taste of consumer is difficult to change
when developed once.
 Pakistan’s economy is another major threat to the company. Pakistan savings and
investment levels are woefully low.
 The brand faces problem if government employs taxes on it, which forces it to raise the
price of its products.
 Nestle also faces increase in competition. There is large competition in juices market.
Competitors like Shezan, Olfrute, Maza and Haleeb are main threat for Nestle Fruita
Vitals,especially Shezan, as it is growing very fast.
 There are not many entry barriers so a large number of local juices can enter juices
market.
 Increasing labor cost is also a threat.
 Increasing inflation rate is also a threat to the brand. Inflation is increasing, so the
purchasing power of people is decreasing day by day.
 The macro environment in Pakistan is changing drastically, leading to an increase in
avenues, competition and complexity. Efficient financial management calls for better
financial decisions.
 Everyday there is something invented in the world. Pakistan is not far behind in case of
latest technologies. For Nestle, there are many technological threats because if the firm is
using new technology one day, a competitor might come with the latest one other day.
  Price fluctuations due to rupee devaluation as raw materials are imported. The
uncertainty of economic conditions poses a great threat as the major funds invested in the
country come from outside Pakistan.
 The present economic crisis in the world, led to the withdrawal of foreign management
from the company and the investment has come to a halt. The uncertainty of economic
conditions poses a great threat as the major funds invested in the country come from
outside Pakistan.
 Consumers are indifferent to buying Engro products or Nestle. It is a threat to Nestle that
consumers can easily shift to Engro products in case of any unfavorable condition.
 Price volatility in competition
 Political instability
 Rising price of raw materials
 Sales of juices drop during winter season.

References:
 https://www.scribd.com/doc/44142954/Nestle-Juices-Project-Final
 https://www.nestle.pk/brands/juices
 Brand SWOT Analysis

Strength:

1. Nestle has a strong company image in Pakistan.

2. Increase in sales and earnings per share as compare to past years
3. High quality maintenance through innovative quality control technology and methods
4. One of the oldest companies since 1866 and operating in Pakistan since 1988
5. Wide range of brands in Pakistan
6. Active marketing strategies
7. Strong participation in wellbeing of society
8. One of the major companies in food industry of Pakistan

https://www.nestle.pk/csv
https://www.nestle.pk/asset-
library/documents/financial_highlights/company_performance_2018.pdf
https://www.nestle.pk/aboutus/quality-and-safety

Weaknesses:
Weaknesses are the areas where Nestle can improve upon. Strategy is about making choices and
weaknesses are the areas where an organization can improve using SWOT analysis, and build on
its competitive advantage and strategic positioning.
 Criticism over high water usage, selling contaminated food, anti-unionism, forced child
labor and using other unethical practices.
 Nestlé is a huge food company selling thousands of different food products daily. Even
with strict quality control measures, the company often has to recall its products in
various markets due to some form of contamination.
 The target market of Nestle products is upper middle and high class because lower
middle and poor class cannot afford to buy Nestle products due to its premium price
compare to other companies like Shezan etc.
 It is a main weakness of Nestle products that there are different companies which provide
substitutes of Nestle products and Nestle does low advertising and marketing.
 Much of its sales depend upon a few well-recognized brands. This makes the company
vulnerable to any sudden changes in consumer behavior.
 Brand structure is also a weakness because there is a high cost for launching new brands
to supplement older, less-fashionable food products.
 Legal and consumer issues are also a weakness. Although Nestle is global food giant but
it got into controversies over the years like Nestle baby formula boycott, child labor by
suppliers, chocolate price fixing etc. which resulted in negative word of mouth.
 Needs more investment in new technologies. Nestle needs to put more money in
technology to integrate the processes across the board.
 Financial planning is not done properly and efficiently. The current asset ratio and liquid
asset ratios suggest that the company can use the cash more efficiently than what it is
doing at present.
 High attrition rate in work force – as compared to other organizations in the industry,
Nestle has a higher attrition rate and has to spend a lot more in comparison to its
competitors on training and development of its employees.
 The marketing of the products left a lot to be desired. Even though the products are a
success in terms of sale but their positioning and unique selling proposition is not clearly
defined which can lead to the attacks in this segment from the competitors.
 Days inventory is high as compared to the competitors' – making the company raise more
capital to invest in the channel. This can impact the long-term growth of Nestle
 Limited success outside core business – Even though Nestle is one of the leading
organizations in its industry it has faced challenges in moving to other product segments
with its present culture.
 Not very good at product demand forecasting leading to higher rate of missed
opportunities as compared to its competitors. One of the reasons why the days inventory
is high as compared to its competitors is that Nestle is not very good at demand
forecasting thus end ups keeping higher inventory both, in-house and in channel.
 Its sales rely heavily on a few well-recognized brands which mean that any sudden
changes in consumer behavior could disrupt the company.
 A lot of their products are in big retailers stores such as Walmart who have the power to
decide the price and placement of their products in store.
 Many new modern brands are entering the market which could be detrimental to
traditional brands such as Nestle.
 Nestle has a bad reputation due to previous incidences such as the creation of their baby
formula, which didn’t specify that clean water was needed when mixing the formula, in
turn causing sicknesses.
 Less ability to provide good foods consistently. As consumers always look for good
tasting and healthy foods, a company should consistently provide healthy foods. Nestle is
often blamed for many products due to poor supplies. It is negatively affecting the image
of Nestle, which is a great weakness.
 Nestle has been criticized many times over different issues including child labor, horse
meat scandal and the creation of their baby formula, which didn’t specify that clean water
was needed when mixing the formula, in turn causing sicknesses.
References:
 https://www.strategicmanagementinsight.com/swot-analyses/nestle-swot-analysis.html
 https://managementtheoriesnestle.wordpress.com/2014/09/04/swot-analysis/
 http://fernfortuniversity.com/term-papers/swot/1433/1026-nestle.php

Opportunities:

1. Support foreign Investors: Government support foreign investors to invest in

Pakistan.
2. Scientifically Gas: In the coming future Nestle will take the benefit of the
scientifically gas.
3. Changing social trend: Consumers in urban areas drink functional drinks on a
regular basis as they increasingly adopt western lifestyles, especially the younger
generation. There was an increase demand for functional drinks over the review
period.
4. Health conscious: Increasing health and hygiene awareness among Pakistan has
greatly increase sales of fruit. Both the government and the media has started
health awareness campaigns to make Pakistanis reliance that consumption of fruit
is essential
5. Market Growth: Juices market expends very fast. A new research proves that in
future every person uses 85.5 liters juices per year.
6. Global Hub: Since manufacturing of some products is cheaper in Pakistan than in
other South Eastern countries

References:

https://pestleanalysis.com/swot-analysis-nestle/
https://www.marketing91.com/swot-analysis-of-nestle/

Threats:

1. Government Regulation: They face problem if government employ taxes on them

which force them to raise the price of their product
2. Increase in competition: The large competition in the juices market.
3. Labor Cost: Increase in Labor cost
 4. Inflation rate: Increase in inflation rate.

References:
https://www.slideshare.net/zakriazubair/nestle-juicesproject
https://www.cheapassignmenthelp.co.uk/books/a-case-study-of-nestle-fruit-juices/
 Industry Analysis
Nestle is the food processing industry’s undisputed leader. In fact, Nestle currently has
over 29 brands that independently earn revenue upwards to a billion Swiss francs every
year (DuBois). Additionally, with only 42% of its food and beverage sales coming from
the United States, Nestle solidifies itself as the most geographically diverse of all major
food and beverage companies. For the company, it’s all about creating long-term value
and catering to customer’s wants and needs by employing a decentralized approach to its
market. In response to the current trend in the food processing industry, Nestle has
focused its core competencies toward advancing health and nutrition.

Nestle Juices:
Encouraged by the consumer response to Nestle Orange Juice that was launched in 1996,
the category of Nestle juices was expanded with the introduction of Mango-Orange and
Mango flavours in the year 2000. This has further strengthened the position of Nestle as
leader in the value added/premium drinks market. Consumer response to these new
flavours has been very upbeat and is expected to gain further. Now nestle company have
launch following juice brand in Pakistan.

Demand for Nestle Juice:

Nestle recently is introduced their juice product which is Nestle Fruit Vitals. Before this
Shezan juice product by Shanawaz Group was highly demanded as domestic product.
Nestle was less demanded than Shezan overall at the time of release, after some time by
its quality about health and Slogan as “Good Food …. Good Life” and producing more
flavor a with same real taste in its tetra packets. Its initial price started from 20 while
Shezan was offering the same quantity pack at 15 rupees, but people prefer Nestles and
demand of Nestle, as new product, increased day by day. Its demand got positive shift
and company introduced new shape and flavor including Red Grapes, Oranges, Apple,
with new slogan 100% real. By these changes Nestle has increased their price of 250 ml
pack from 20 to 25. Shezan also made a similar attempt to increase its demand but the
idea was not good, and new packaging looks strange as duplicate for changing of packet
and price brings decrease in Shezan demand. Nestle became the most demanded product
and has increased its price from 25 to 30.
Some of their products are:

Nestle Pure Orange Juice:

Orange are in demand not only for their divine juicy flavor but equally celebrated for their health
benefits. They are naturally low in calories and an excellent source of Fiber and Vitamin C.
Having orange juice every day is a great of strengthen the body resistance against infection and
diseases and maintaining health life style.

Nestle Clear Apple Nectar:

Apples have no fat and are cholesterol free nestle clear Apple nectar is made from the
finest apples and is 100% clear.
As irresistible as in sin itself give in to the amber kick of Nestle clear apple nectar.

Nestle Red Grape Nectar:

Grapes are called the Queen of Fruits are known for their great internal body cleansing
properties. They are good source of Vitamin C and Potassium that plays an important role
in proper heart functioning by regulating blood pressure and heart. Relish the full bodies,
smooth flavor nestle red grapes nectar and let your taste buds soak in sensuous richness
of red grapes
Nestle Chaunsa Nectar:
Prepare from the finest quality of Chaunsa mangoes that are procured from the best fruit
farms. The 100% rich mangoes nectar is nutritious, refreshing and wonderfully delicious.
It helps to replenish the lost vigor during work outs and enhances your fitness by
providing fortified energy endowed in dietary fiber and Vitamin A, C and E.

Nestle Pineapple Nectar:

Pineapple are a good source of Vitamin C, an antioxidant that helps to fight against free
radicals, one of the main reason for aging. Made from Premium Pineapple. It brings you
the exotic taste of Pineapple with a refreshing tropical taste of flavor and is a good source
of Vitamin C.
In the following brief description of the various processes involved in the fruit production
are outlined.

Fruit Juice Production Process:

Fruit boiler on where it is cooked and shifted to the plate heat exchanger. Then stored in
the storage tank. Than supplied to the mixing tank in the desired quantity while in mixing
tanks. Any additives that they are made at this stage before it is pumped to syrup storage
tanks. Blended juice is than pumped through pasteurizer. Where it is heated to 90 degree
centigrade to inactivate enzymes and other living organisms. After pasteurization the
juice passes through final filtration, before loading it in the juice storage tank. Juice from
the tank is ready for packaging.

Packaging and labeling than storage

The juice will be packed in the quantities demanded by the market. Consumer packs as
like 200 ml and 1000 ml tetra pack and then label the nestle juices. Product will be in
cool dry store
Juice storage tank
Filing and storage tank
Cooling and storage
 ECONOMY OF PAKISTAN
This report is based on the key indicators affecting the economy of Pakistan and how Pakistan’s
economy has shaped in last five years and what were the important factors affecting the economy
of Pakistan during this time period.

GDP:
Gross Domestic Product, tells about the market value of finished goods and services produced
within a country in a certain time period.

GDP of Pakistan:
GDP has increased over the last five years. In 2013 it was about 231 billion U.S. dollars. It
increased to $244 billion in 2014. 2015 saw a better leap in GDP of Pakistan reaching $270 billion
and $278 billion in 2016. In 2017 it crossed the $300 billion mark reaching $304 and according to
latest numbers it is somewhere around $307 billion in fiscal year 2018-19. Growth in agriculture
sector, industrial sector and services sector has been the main reason of constant growth in GDP
of Pakistan.

Inflation:
Means rise in prices of goods and services utilized by consumers.

Inflation of Pakistan:
Inflation rate in Pakistan has come down drastically since 2013 which is a good sign for the
economy. In 2013 inflation rate of Pakistan was 7.36% it increased by 1.26% in 2014 and reached
8.62% but in 2015 it took huge slide downwards and dropped to 4.53%. In 2016 which was by far
the best year in terms of inflation rate in Pakistan was 2.86% and increased to 4.15% in 2017. In
2018 it was 3.93% which is a drop by 0.22% from the previous fiscal year. The reason behind this
decrease in inflation rate could be the decrease in International oil prices and stability in value of
PKR to U.S. dollar.

Exports:
Are the goods or services sent or provided to another country.

Exports of Pakistan:
Has been the cause of concern over the last five years and being one of the most important
indicators of a booming economy it is not a good sign for Pakistan. In 2013 exports of Pakistan
were $25.1 billion and from there on it has come down every year. In 2014 it went down to $24.7
billion. It further slumped to $22 billion in 2015. $20.5 billion in 2016. In 2017 it took off a bit
and reached $21.7 billion. It has increased to $24.8 billion in 2018.
Imports:
Are the goods or services received from another country.

Imports of Pakistan:
In 2013 Imports of Pakistan were $43 billion. It increased by approximately $4 billion and reached
$47 billion. In 2015 imports decreased and went back to $43 billion. It reached $46 billion in 2016
and a massive high of $57 billion in 2017. It decreased to $56 billion in 2018. Increase in imports
is never a good sign for an economy aiming to grow and it has been an on and off ride for Pakistan
since 2013 as far as the imports are concerned.

Investment:
Money spent on a particular project to yield gains.

Investment in Pakistan:
Investment % of GDP in 2013 was 14.9%. In 2014 it was stable at 14.9%. In 2015 it reached 15.1%
and in 2016 it increased by 0.2% and reached 15.3%. 2017 and 2018 saw interest of investors in
Pakistan and in 2017 it was 16.1% and increased to 16.4% in 2018. Investors are seeing Pakistan
as land of opportunities and are willing to invest in Pakistan which is a good sign for our economy.
It will create employment opportunities too. Better law and order situation of Pakistan is the key
behind all this.

Remittances:
In this case, remittance is referred to as the money sent by countrymen living overseas.

Remittances of Pakistan:
They are a key part of economy of Pakistan as many Pakistanis living overseas send huge amount
of remittances to their loved ones here which gives great strength to the economy. In 2013
Remittances of Pakistan were around $14.3 billion. It increased and reached $17.3 billion in 2014.
$19.2 billion in 2015 and had a marginal increase in 2016 reaching $19.7. In 2017 it was $ 19.5.
It reached to an all time high in 2018 with $20.9 billion.

Balance of Trade:
Difference between country’s imports and exports.

Balance of Trade of Pakistan:

It has been negative for a very long time because our imports have always been way ahead of our
exports. In 2013 it was (-)$18 billion. In 2014 it increased and reached (-)$23 billion. In 2015 it
slightly went down to (-)$21 billion. In 2016 it moved up to (-)$26 billion. In 2017 it saw a massive
shift upwards and reached (-)$36 billion and came slightly down to (-)$32 billion in 2018. Reason
has been the increase in imports compared to exports because we have not been able to cope up
with the demand supply formula in Pakistan.
Revenue:
Profit earned by a country through taxes, duties and state owned enterprises.

Revenue of Pakistan:
Since 2013 Revenue has been on a rise. In 2013 total revenue collected 2982 billion PKR. It
increased massively in 2014 and reached to 3637 billion PKR. In 2015 the increase was not huge
and the Government managed to collect 3931 billion PKR. In 2016 and 2017 it kept on growing
and reached 4447 billion PKR and 4936 billion PKR respectively. Lastly in 2018, it was recorded
at 5228 billion PKR.

Debt:
Amount of money to be paid.

Debt of Pakistan:
Total External Debt has increased by each passing year since 2013. It started with $60.9 billion in
2013. In 2014 it moved up to $65.3 billion. It remained almost the same in 2015. In 2016 it took a
big leap and reached $73.9 billion. In 2017 it rose up to $83.5 billion. In 2018 it was recorded at
$99.1 billion. Reason is the non transparency of the projects built with these debts and not creating
more wealth creation opportunities.

Foreign Exchange Reserves:

In order to pay out liabilities when required money or assets held by a central monetary authority
is known as Foreign exchange reserves.

Foreign Exchange Reserves of Pakistan:

Have not been very stable since. In 2013 Pakistan had $7.5 billion as foreign exchange reserves.
It doubled in 2014 and reached $14.31 billion. In 2015 it reached $20 billion and in 2016 it
increased even more and reached $22 billion. It 2017 it went down by $3.5 billion and reached
$18.5 billion. According to the most recent numbers Pakistan’s foreign exchange reserves have
had a huge dip and have come down drastically to $8 billion. Political uncertainty due to General
Elections 2018 could be one of the main reason of this huge drop.

Current Account:
Net income plus trade balance plus net cash transfers equals to current account.

Current Account of Pakistan:

Pakistan has been in the state of current account deficit for a very long time now. Biggest reason
has been the trade deficit Pakistan is facing with imports two times more than exports. It was (-
)$2.5 billion in 2013. (-)$3.1 billion in 2014. (-)$2.8 billion in 2015. (-)$4.9 billion in 2016 which
is a huge leap and almost three times more in 2017 compared to 2016 reaching (-)$12.1 billion. It
further dropped to (-)$18.9 billion 2018. According to recent numbers Pakistan current account
deficit in fiscal year 2019 is around (-)$7 billion.
Growth in different sectors of Pakistan’s economy:
Services sector including communication, transportation etc has had the most exponential growth
in last five years with its contribution in GDP growth increasing from 597 billion PKR to 746
billion PKR. Industrial sector has been the second best performer over the last five years starting
from 208 billion PKR to 259 billion PKR. Agriculture sector growth has been slow over the last
five years starting from 215 billion PKR and reaching 233 billion PKR.

Conclusion:
All in all since 2013 Pakistan is an economy on a rise apart from few key indicators which through
right decisions and strong economic policies of the new elected Government could get better too
and Pakistan could become the land of opportunities for rest of the world and might even join the
big economies of the world. Signs are positive and recent numbers suggest Pakistan’s economy is
only headed towards one direction and that is upwards.

References:
https://wits.worldbank.org/
http://www.sbp.org.pk/
https://www.wikipedia.org/
https://tradingeconomics.com/
https://www.theglobaleconomy.com/
https://www.ceicdata.com/en
http://www.pbs.gov.pk/
https://www.statista.com/