The Economy of Pakistan-2011

The economy of Pakistan is the 27th largest in absolute dollar terms. Pakistan has a semiindustrialized 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, a fast growing population, high inflation rate, increasing poverty level and low quality of education, terrorism etc . The gross domestic product (GDP) is the market value of all final goods and services produced within a country in a given period of time. It is often positively correlated with the standard of living, although there are alternative measures to GDP too. Pakistan's GDP is US$167 billions, which makes it the 48th-largest economy in the world or 27th largest by purchasing power adjusted exchange rates. Today, Pakistan is regarded as to having the second largest economy in South Asia. In Pakistan GDP growth, Sharpe increase by gains in the industrial and service sectors, remained in the 6-8% range in 2004-06 due to economic reforms in the year 2000 by the Musharraf government. In 2005, the World Bank named Pakistan the top reformer in its region and in the top 10 reformers globally. Pakistan's gross domestic product, if measured by purchasing power parity is estimated to be $475.4 billion while its per capita income stands at $2,942. The poverty rate in Pakistan is estimated to be between 23% and 28%. GDP growth was steady during the mid-2000s at a rate of 7% however its slowed down during the Economic crisis of 2008 to 4.7%. A large inflation rate of 24.4% and a low savings rate, and other economic factors, continue to make it difficult to sustain a high growth rate. In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time. Inflation remains the biggest threat to the economy, jumping to more than 9% in 2005 before easing to 7.9% in 2006. In 2008, following the course in global petrol prices inflation in Pakistan reached as high as 25.0%. The central bank is pursuing tighter monetary policy while trying to preserve growth. In 2007/08, the sharp rise in international oil and food prices, combined with internal political confusion, led to rapidly expanding macroeconomic imbalances in Pakistan. The development emphasis remains on poverty reduction and social protection, particularly on enhancing social safety nets for the weakest sections of society. , Infrastructure is also vital, particularly in water management, transport, education and energy. Inflation and unemployment are negatively correlated simply stated the lower the unemployment in an economy, the higher the rate of inflation. PAKISTAN STATISTICS GDP (official exchange rate): $124 billion (2006 est.) GDP - per capita (PPP): $2,600 (2006 est.) GDP - real growth rate: 6.6% (2006 est.) GDP (purchasing power parity): $437.5 billion (2006 est.) GDP - composition by sector: agriculture: 22% industry: 26% services: 52% (2006 est.)

The Situation in Pakistan is that of increasing economic and political instability and the destabilized government is losing control. In growth and in Investment we lose investor because of political situations and collapse of external demand for its exports and decline in accessibility of external capital to finance or invest in growth process of the country. Poverty, the insufficiency of income to meet basic needs, low quality of life, rejection of opportunities and choices basic to human development are different facets of poverty. The main objectives of government policies are should be to raise the standard of living and improve the socioeconomic conditions of the people and thus reduce the incidence of poverty, to control inflation, reduce the level of unemployment, sustain high level of GDP, control corruption and make the country on the way of development by honesty.