Economy - overview:
Pakistan, an impoverished and underdeveloped country, has suffered from decades of internal political disputes, low levels of foreign investment, and a costly, ongoing confrontation with neighboring India. However, IMF-approved government policies, bolstered by generous foreign assistance and renewed access to global markets since 2001, have generated solid macroeconomic recovery the last four years. The government has made substantial macroeconomic reforms since 2000, although progress on more politically sensitive reforms has slowed. For example, in the budget for fiscal year 2006, Islamabad did not impose taxes on the agriculture or real estate sectors, despite Pakistan's chronically low tax-to-GDP ratio. While long-term prospects remain uncertain, given Pakistan's low level of development, medium-term prospects for job creation and poverty reduction are the best in more than a decade. Islamabad has raised development spending from about 2% of GDP in the 1990s to 4% in 2003, a necessary step towards reversing the broad underdevelopment of its social sector. GDP growth, spurred by double-digit gains in industrial production over the past year, has become less dependent on agriculture, and remained above 7% in 2004 and 2005. Inflation remains the biggest threat to the economy, jumping to more than 9% in 2005. The World Bank and Asian Development Bank announced that they would provide US $1 billion each in aid to help Pakistan rebuild areas hit by the October 2005 earthquake in Kashmir. Foreign exchange reserves continued to reach new levels in 2005, supported by steady worker remittances. In the near term, growth probably cannot be sustained at the 7% level; however, massive international aid, increased government spending, lower taxes, and pay increases for government workers will help Pakistan maintain strong GDP growth over the longer term.

GDP (purchasing power parity):
$384.9 billion (2005 est.)

GDP (official exchange rate):
$89.79 billion (2005 est.)

GDP - real growth rate:
7.8% (2005 est.)

GDP - per capita (PPP):
$2,400 (2005 est.)

GDP - composition by sector:
agriculture: 21.6%
industry: 25.1%
services: 53.3% (2005 est.)

Labor force:
46.84 million
note: extensive export of labor, mostly to the Middle East, and use of child labor (2005 est.)

Labor force - by occupation:
agriculture: 42%
industry: 20%
services: 38% (2004 est.)

Unemployment rate:
6.6% plus substantial underemployment (2005 est.)

Population below poverty line:
32% (FY00/01 est.)

Household income or consumption by percentage share:
lowest 10%: 4.1%
highest 10%: 27.6% (FY96/97)

Distribution of family income - Gini index:
41 (FY98/99)

Inflation rate (consumer prices):
9.2% (2005 est.)

Investment (gross fixed):
15.3% of GDP (2005 est.)

Budget:
revenues: $15.45 billion
expenditures: $20.07 billion; including capital expenditures of $NA (2005 est.)

Public debt:
54.3% of GDP (2005 est.)

Agriculture - products:
cotton, wheat, rice, sugarcane, fruits, vegetables; milk, beef, mutton, eggs

Industries:
textiles and apparel, food processing, pharmaceuticals, construction materials, paper products, fertilizer, shrimp

Industrial production growth rate:
10.7% (2005 est.)

Electricity - production:
76.92 billion kWh (2003)

Electricity - consumption:
71.54 billion kWh (2003)

Electricity - exports:
0 kWh (2003)

Electricity - imports:
0 kWh (2003)

Oil - production:
63,000 bbl/day (2005 est.)

Oil - consumption:
365,000 bbl/day (2004 est.)

Oil - exports:
NA bbl/day

Oil - imports:
NA bbl/day

Oil - proved reserves:
341.8 million bbl (2005 est.)

Natural gas - production:
23.8 billion cu m (2003 est.)

Natural gas - consumption:
23.8 billion cu m (2003 est.)

Natural gas - exports:
0 cu m (2001 est.)

Natural gas - imports:
0 cu m (2001 est.)

Natural gas - proved reserves:
759.7 billion cu m (2005)

Current account balance:
-$1.43 billion (2005 est.)

Exports:
$14.85 billion f.o.b. (2005 est.)

Exports - commodities:
textiles (garments, bed linen, cotton cloth, yarn), rice, leather goods, sports goods, chemicals, manufactures, carpets and rugs

Exports - partners:
US 23.5%, UAE 7.4%, UK 7.3%, Germany 5%, Hong Kong 4.4% (2004)

Imports:
$21.26 billion f.o.b. (2005 est.)

Imports - commodities:
petroleum, petroleum products, machinery, plastics, transportation equipment, edible oils, paper and paperboard, iron and steel, tea

Imports - partners:
Saudi Arabia 11.6%, UAE 10%, US 9.7%, China 8.4%, Japan 6.5%, Kuwait 5.6% (2004)

Reserves of foreign exchange and gold:
$11.71 billion (2005 est.)

Debt - external:
$39.94 billion (2005 est.)

Economic aid - recipient:
$2.4 billion (FY01/02)

Currency (code):
Pakistani rupee (PKR)

Exchange rates:
Pakistani rupees per US dollar - 59.515 (2005), 58.258 (2004), 57.752 (2003), 59.724 (2002), 61.927 (2001)