In the fiscal year 1949-50, Pakistan recorded a national savings rate of 2%, a foreign savings rate of 2%, and an investment rate of 4%. Given the scarcity of capital in Pakistan's relatively small private sector, the government turned to the public sector as a means to foster the development of the economic and industrial base. The West Pakistan region, in particular, experienced poverty rates ranging from 55% to 60%. Pakistan faced a dearth of economic infrastructure, financial resources, and an industrial foundation. Its per capita income stood at roughly $360 (in 1985 international dollars) in 1950, and the literacy rate was a mere 10%. Remarkably, about 65% of the labor force was engaged in agriculture, and the agricultural sector played a pivotal role, contributing to 99.2% of exports and accounting for nearly 90% of foreign exchange earnings.ĭespite Pakistan's considerable wealth in terms of land and mineral resources in both East and West Pakistan, including valuable resources like natural gas, crude oil, coal, limestone, and marble, the nation grappled with a multitude of challenges. During this period, Pakistan had a population of around 30 million, with approximately 6 million living in urban areas. Agriculture contributed 53% of the country's GDP in 1947 and a slightly higher 53.2% in 1949-50. In the late 1940s, when Pakistan came into existence in 1947, its economy was primarily agrarian. Main article: Economic history of Pakistan The Late 1940s: Dawn of a New National Economy The crisis has led to sharp deappreciation of Pakistani ruppee and downgrading of country's credit ratings by various agencies which has further increased the possibility of default. Amid adverse effects of ongoing Russo-Ukrainian War, Pakistan has been facing shortage in supply and high inflation in prices of food, oil, gas and electricity. However, the country continues to face the challenges of rapidly growing population, high illiteracy, corruption, political instability, a hostile neighborhood and heavy foreign debt.įalling low on budgets for paying interest on its debt, Pakistan has been facing an economic crisis since 2022. Pakistan is currently undergoing a process of economic liberalization, including the privatization of all government corporations, which is aimed at attracting foreign investment and decreasing budget deficits. Primary export commodities include textiles, leather goods, sports equipment, chemicals, and carpets/rugs. Pakistan was classified as a semi-industrial economy for first time in late 1990s albeit an underdeveloped country with heavy dependence on agriculture, textile industry being dependent on cotton production. The growth poles of Pakistan's economy are situated along the Indus River the diversified economies of Karachi and major urban centres in Punjab, co-existing with lesser developed areas in other parts of the country. Although, the economy began to privatise in the 1990s. With the beginning of Zia-ul Haq's regime in the 1980s, a more "Islamic" economy was adopted which outlawed economic practices forbidden in Sharīʿah and mandated traditional religious practices instead. Nationalisation of significant portion of the sector including financial services, manufacturing and transportation had begun in the early 1970s. In the formative decades of Pakistan, the economy was largely based on private industries. As of FY22, the nominal GDP of Pakistan stands at US$376 billion with a nominal GDP per capita of US$1,658 (177th) its GDP based on PPP stands at US$1.512 trillion with a GDP (PPP) per capita of US$6,662 (168th). In 2021, the country had a population of 227 million people. It is the 23rd-largest in terms of GDP based on purchasing power parity (PPP). The economy of Pakistan is classified as a developing economy. All values, unless otherwise stated, are in US dollars.
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