In Pakistan, people are fighting each other for food, running behind trucks to buy flour. Pakistan's food is running out, and Pakistan is facing an economic crisis for the last 50 years. The whole country has money for the next 3 weeks' imports, after that it will be over.
💡Table of Content
➤ Why Pakistan needs help
Dams of all things are increasing in Pakistan. Inflation generally remains at 4-6%, in many places, it is even 30%. Things which used to cost Rs 100 last year are available for Rs 130 today. Onion common things will become 5 times more expensive.
Shopping malls and shops are instructed to switch off all lights at 8 pm because Pakistan does not have the money to generate power. The Pakistan Embassy has property in Washington that Pakistan wants to sell because Pakistan does not have the money to run the country.
Pakistan is saving money from every work.
➤ Pakistan's Economy Some Parameter
➲ Gross Domestic Product (GDP)
Pakistan is a developing country in South Asia and Its population of over 220 million. The country's economy has mixed growth with GDP growth rates fluctuating between 1.5% and 5.5%. In 2020, the COVID-19 pandemic had a significant impact on Pakistan's economy, leading to a ripening in GDP growth rate to -0.4% for the first time in 68 years. In 2021, the GDP growth rate rebounded to 3.9%.
The threshing sector is a significant freelancer to Pakistan's GDP, written for virtually 24% of the country's GDP and employing virtually 40% of the workforce. The industrial sector is the second-largest freelancer to Pakistan's GDP, written for virtually 20% of the country's GDP.
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Pakistan's services sector is moreover an essential freelancer to its economy, written for virtually 56% of the country's GDP.
The country has significant growth in the services sector, IT, telecommunications, financial services, and tourism. Pakistan has a large informal economy, which is unscientific to be virtually 30% of the country's GDP. The informal sector like small businesses, self-employed, and daily wage earners are not registered with the government and are not subject to taxation.
Pakistan's government has implemented several economic reforms in recent years to reduce its fiscal deficit and modernize its economic outlook. These reforms include measures to increase tax revenue, reduce government expenditure, and modernize the ease of doing business. In conclusion, Pakistan's economy has a diverse mix of sectors contributing to its GDP, with significant potential for growth in the services sector.
|
Decade Wise GDP |
|
Year Wise GDP |
||||
|
Sr. No |
Years |
GDP Growth Rate(Average) |
GDP Growth Rate(Range) |
|
Years |
GDP Growth Rate |
|
1 |
2021 |
3.9% |
- |
|
2021 |
3.9% |
|
2 |
2011-2020 |
3.8% |
1.7% to 5.8% |
|
2020 |
-0.4% |
|
3 |
2001-2010 |
4.6% |
1.8% to 8.4% |
|
2019 |
1.9% |
|
4 |
1991-2000 |
4.7% |
1.5% to 7.5% |
|
2018 |
5.2% |
|
5 |
1981-1990 |
6.3% |
2.7% to 8.4% |
|
2017 |
5.4% |
|
6 |
1971-1980 |
4.6% |
-1.5% to 9.6% |
|
2016 |
4.5% |
|
7 |
1961-1970 |
6.8% |
2.2% to 10.8% |
|
2015 |
4.1% |
|
8 |
1951-1960 |
5.1% |
1.2% to 9.9% |
|
2014 |
4.0% |
|
9 |
1947-1950 |
- |
-6.4% to 10.9% |
|
2013 |
3.7% |
➲ Inflation Rate
Inflation in Pakistan has been continuing to rise over the past few years and also had an average inflation rate of 7.8% from 2015 to 2020. In 2019, inflation is over 12% due to various factors and It's such as a depreciating currency, high food prices, and increased energy prices. The COVID-19 pandemic in 2020 had a mixed impact on inflation in Pakistan.
The country's inflation rate initially decreased because of lower energy prices & reduced demand and also high in the second half of the year due to a rise in food prices & other factors.
In 2021, inflation remained high an average rate of around 9.2% in the first half of the year.
The Pakistani rupee inflation against the US dollar leads to higher import costs for goods and services. The increase in energy prices such as electricity and gas has also contributed to inflation in Pakistan. Food inflation has been a significant contributor to overall inflation in Pakistan, driven by factors supply chain disruptions, hoarding, and increased food prices.
Pakistan's monetary policy, interest rates, and money supply can also contribute to inflation in the country.
|
Inflation Rate |
||
|
Sr. No. |
Years |
Inflation Rate |
|
1 |
2021 |
9.7% (as of November) |
|
2 |
2020 |
8.9% |
|
3 |
2019 |
11.0% |
|
4 |
2018 |
6.8% |
|
5 |
2017 |
4.1% |
|
6 |
2016 |
4.2% |
|
7 |
2015 |
2.8% |
|
8 |
2014 |
8.6% |
|
9 |
2013 |
7.7% |
➲ Unemployment Rate
Pakistan's unemployment rate has been very high over the past year with an average rate of 6.1% from 2011 to 2020. In 2020, Pakistan's unemployment rate reached a 17-year high of 4.4%, mainly due to the impact of the COVID-19 pandemic on the country's economy. In the first half of 2021, Pakistan's unemployment rate was high at 4.0%.
Pakistan's economy is in the informal sector, which is low-paying and unstable jobs.
Women squatter increasingly challenges in the labor market due to cultural and social barriers, which has led to a higher unemployment rate among women compared to men. The government can create a more favorable business environment to encourage investment and job creation.
The government can invest in education and vocational training programs to improve the skills of the workforce and address the skill mismatch issue. The government can promote formal employment and reduce the size of the informal sector by providing incentives to employers to register their businesses and workers.
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The government can implement policies and programs to fill the gender gap in the labor market, such as providing incentives to employers to rent increasingly women and promoting sex entrepreneurship.
|
Unemployment Rate |
||
|
Sr. No. |
Years |
Unemployment Rate |
|
1 |
2020 |
4.4% |
|
2 |
2019 |
5.8% |
|
3 |
2018 |
5.8% |
|
4 |
2017 |
5.5% |
|
5 |
2016 |
5.5% |
|
6 |
2015 |
5.9% |
|
7 |
2014 |
5.9% |
|
8 |
2013 |
6.0% |
➤ Reasons for Economy crisis
Pakistan is facing back-to-back disasters.
➲ Political Instability
The history of Pakistan is a full game of thrones. Pakistan gained independence from us in 1947. But its first democratic action took place in 1970, which was after 23 years of independence. from 1947 till today, Pakistan has seen 29 Prime Ministers and none of them has completed his full term, which means 5 years.
Its Prime Minister has been removed from his post 18 times. The reason for corruption is either because of the military. Just last year, Imran Khan did not have to leave his position. Imran Khan was a national hero who won the World Cup in cricket.
They had come with the hope of creating a new Pakistan, but something happened that Shehbaz Sharif along with the leaders of different husbands brought a no-confidence motion against them and Trapped their Government.
Shahbaz Sharif's nickname is Punjab Speed because he has been the Chief Minister of Punjab 4 times and he has worked efficiently in Punjab.
People have hope that Shahbaz Sharif will make a new Pakistan. This is the concept of making new, it creates Economic problems. When the government changes, the financial policy also changes. Opposite decisions are taken to prove the failure of the first government, which encourages it to become an economic disaster.
➲ Terrorism
Pakistan has been affected by terrorist groups for many years, with militant groups Taliban and Al Qaeda operating in the country. This has loss of life, damage to property, and a negative impact on the economy. These attacks have targeted public places, government installations, and security forces, causing widespread fear and insecurity.
Terrorism has moreover hurt the economy of Pakistan.
It has less foreign investment, reduced tourism, and damaged the reputation of the country in the international community. This has led to social fragmentation and mistrust among different communities, which has further exacerbated the crisis faced by the country. According to a report by, Pakistan Institute has suffered for Studies, from 2001 to 2018, Pakistan suffered over 73,000 casualties, including over 17,000 civilians, in terrorist incidents.
The report is unscientific that the economic forfeit of terrorism in Pakistan during this period was virtually $126 billion. The forfeit of Pakistan's military operations versus terrorists in the tribal areas and other parts of the country has moreover been substantial. In 2016, the country's military was unscientific that it had spent virtually $118 billion on the war on terror since 2001.
➲ Economic challenges
For the last many years, Pakistan's economy has been going down year by year and its debt is increasing year by year. The World Bank says that this year their economy will grow by 2% and inflation will increase by 23%. Talking about their export and imports, Pakistan's exports are 30 billion dollars and its imports are around 90 billion.
That means every year Pakistan earns 30 billion and spends 90 billion. Because of this big gap, the Forex reserves of Pakistan are decreasing rapidly.
Pakistan's GDP is 376 billion dollars, its debt is 274 billion dollars and its interest is increasing.
Every year 1/3 of Pakistan's budget goes to pay interest. Due to this, Pakistan has fallen into a death trap and the only option to get out of it is to take a loan. In the coming time, Pakistan has to repay the debt of 8 billion dollars and it has only 5.8 billion dollars in its foreign reserves.
The government knows that the price of food items increases but it takes money to give cheap things to the people. Pakistan's global image is getting down due to frequent changes in government.
➲ Climate Disaster
The flood damage in Pakistan last year was 30 billion dollars and that is a lot for a struggling country. Pakistan used to contribute 1% of global emissions, but still, they suffered a huge loss due to heavy rains. Pakistan is also in danger from the Taliban. Pakistan can be divided into four different parts, Pakistan can lose faith in its people.
➤ Impact on India
Today Pakistan is definitely in problem but many institutes and countries love Pakistan. Together with the institute and different countries, they have donated 10 billion dollars to Pakistan. America will also help Pakistan to build its economy.
Now protests are happening in POK and the people on that side of LOC say that it has to become a part of India. Trend-wise, if there is not much trade between India and Pakistan, then its economic impact is negligible.
It is not beneficial for any country to have an economic crisis country.
Right now we have two countries Shri Lanka and Pakistan in our neighborhood. China has also extended a helping hand, everyone knows that China takes control of the whole country by helping them. At this time, if Pakistan does not get help from the IMF, then China will come and help it and in return will ask for something that will harm India.
👉 Kashmir Conflict India VS Pakistan
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