Pakistan is a developing country with an emerging economy and has a potential to become world’s 20th largest economy by 2030. With GDP (PPP) of $1.195 trillion, the economy of Pakistan is 24th largest in the world in terms of purchasing power parity, and 40th largest in terms of nominal GDP of $278.019 billion. The GDP growth rate was recorded as 3.29%▲ in 2018-19, and the estimated growth rate for financial year 2019-20 is 2.4%.
Pakistan has a mixed economy with three main sectors:
- Industry, and
- Services sector
However, the economy has been severely affected by continuous adverse civil-military relations, repeated military coups, repeated conspiracies against the democratic process, political unrest and unstable weak civilian government. These factors lead to poor law & order situation, mismanagement, lack of long-term planning, failure of bureaucratic functions, bad governance, and corruption in the country.
THREE MAIN SECTORS OF THE ECONOMY OF PAKISTAN
The agriculture sector contributes 18.5% to GDP. It is the largest employer absorbing 38.5% of the country’s total labour force. The agriculture sector recorded a growth of 0.85%▲ in the financial year 2018-19 (July 01, 2018 to June 30, 2019). The agriculture sector has four sub-sectors: crops, livestock, fisheries, and forestry. Livestock is the most important sub-sector of the agriculture sector having share of 60.54% in agriculture and contributes 11.22% to the country’s total GDP.
Agriculture Package for Small Farmers
Government of Pakistan on September 15, 2015 announced a relief package of Rs.341 billion for small farmers. Read More
The industrial sector contributes 20.87% to GDP. It is the major source of tax revenues for the government. The Industrial sector recorded a growth of 1.40%▲ in the financial year 2018-19. The manufacturing is the most important sub-sector of the industrial sector containing 64.4% share in the overall industrial sector, and contributes about 13.5% towards the overall GDP. The manufacturing has three components:
- Large-Scale Manufacturing (LSM)
- Small Scale Manufacturing (SSM), and
The Large Scale Manufacturing (LSM) has 78% share in the manufacturing sub-sector and contributes 10.2% in the total GDP. The important sub-sectors of the industry sector are: Textile Industry, Engineering Sector, Automobile Industry, Fertilizer Industry, Cement Industry, and Small and Medium Enterprises.
3. Services sector
The services sector contributes 60.23% to GDP. It is the largest contributor to the Gross Domestic Product (GDP). The Services sector recorded a growth of 4.71%▲ in the financial year 2018-19. The important sub-sectors of the services sector are: Transportation, Information and Communication, and Financial Services.
Pakistan is 4th largest producer of cotton in the world, the raw material for textile industry. And, the textile is the most important manufacturing sector of Pakistan and has the longest production chain. The share of textiles products in national exports is almost 62%. Read More