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The Growth Rate Of Pakistan

The gross domestic product or gross domestic income is one of the measures of national income and output for a given country’s economy. GDP can be defined in three ways, all of which are conceptually identical. First, it is equal to the total expenditures for all final goods and services produced within the country in a stipulated period of time (usually a 365-day year). Second, it is equal to the sum of the value added at every stage of production by all the industries within a country, plus taxes less subsidies on products, in the period. Third, it is equal to the sum of the income generated by production in the country in the period—that is, compensation of employees, taxes on production and imports less subsidies, and gross operating surplus (or profits).

Pakistan’s GDP

The Gross Domestic Product (GDP) in Pakistan was worth 211.09 billion US dollars in 2011, according to a report published by the World Bank. The GDP value of Pakistan is roughly equivalent to 0.34 percent of the world economy. Historically, from 1960 until 2011, Pakistan GDP averaged 48.82 billion USD reaching an all time high of 211.09 billion USD in December of 2011 and a record low of 3.71 billion USD in December of 1960.

GDP Growth Rate

The Gross Domestic Product growth rate measures the increase in value of the goods and services produced by an economy. Economic growth is usually calculated in real terms or inflation-adjusted terms, in order to net out the effect of changes on the price of the goods and services produced. The Gross Domestic Product can be determined using three different approaches, which should give the same result. These different methods are the product technique, the income technique , and the expenditure technique.

Pakistan GDP Growth Rate

The Gross Domestic Product (GDP) in Pakistan expanded 3.67% in the second quarter of 2012 over the previous quarter. Historically, from 1952 until 2012, Pakistan GDP Growth Rate averaged 4.98% reaching an all time high of 10.22% in June of 1954 and a record low of -1.80 Percent in June of 1952. The Gross Domestic Product (GDP) growth rate provides an aggregated measure of changes in value of the goods and services produced by an economy. Pakistan’s economy has suffered in the past from decades of internal political disputes, a fast growing population, mixed levels of foreign investment, and war against terrorism. However, IMF-approved government policies, bolstered by foreign investment and renewed access to global markets, have generated solid macroeconomic recovery during the last decade.

Foreign Direct Investment (FDI)

Foreign direct investment is net inflows of investment to acquire a lasting management interest in an enterprise operating in an economy other than that of the investor. It is the sum of equity capital, reinvestment of earnings, other long-term capital, and short-term capital as shown in the balance of payments. This series shows total net, that is, net FDI in the reporting economy from foreign sources less net FDI by the reporting economy to the rest of the world.

FDI in Pakistan

The Foreign direct investment; net (BoP; US dollar) in Pakistan was last reported at 1,971,000,000 in 2010, according to a World Bank report published in 2012.

Inflation Rate

Inflation refers to a general rise in prices measured against a standard level of purchasing power. Previously the term was used to refer to an increase in the money supply, which is now referred to as expansionary monetary policy or monetary inflation. Inflation is measured by comparing two sets of goods at two points in time, and computing the increase in cost not reflected by an increase in quality. There are, therefore, many measures of inflation depending on the specific circumstances. The most well known are the CPI which measures consumer prices, and the GDP deflator, which measures inflation in the whole of the domestic economy.

Inflation Rate in Pakistan

The inflation rate in Pakistan was recorded at 9.10 percent in August of 2012. Historically, from 2003 until 2012, Pakistan Inflation Rate averaged 10.62 Percent reaching an all time high of 25.33 Percent in August of 2008 and a record low of 1.41 Percent in July of 2003. Inflation rate refers to a general rise in prices measured against a standard level of purchasing power. The most well known measures of Inflation are the CPI which measures consumer prices, and the GDP deflator, which measures inflation in the whole of the domestic economy.

Forex Reserves

Foreign reserves in a strict sense are only the foreign currency deposits and bonds held by central banks and monetary authorities. However, the term in popular usage commonly includes foreign exchange and gold, special drawing rights (SDRs), and International Monetary Fund (IMF) reserve positions. This broader figure is more readily available, but it is more accurately termed official international reserves or international reserves. These are assets of the central bank held in different reserve currencies, mostly the United States dollar, and to a lesser extent the euro, the pound sterling, and the Japanese yen, and used to back its liabilities, e.g., the local currency issued, and the various bank reserves deposited with the central bank, by the government or financial institutions.

Forex Reserves of Pakistan

Pakistan’s total foreign reserves had stood at $14.5745 billion on July 27, 2012, according to the SBP. According to the break-up, foreign reserves held by SBP were $10.1393 billion, and net foreign reserves held by banks other than the SBP amounted to $4.4352 billion on July 27.

External Debt

Total external debt is debt owed to nonresidents repayable in foreign currency, goods, or services. It is the sum of public, publicly guaranteed, and private nonguaranteed long-term debt, short-term debt, and use of IMF credit. Data are in current U.S. dollars.

External Debt of Pakistan

Country

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Pakistan

32

38

31.5

32.3

33.54

33.97

38.8

42.38

38.8

44.15

53.62

57.12

61.83

The above table shows the external debt of Pakistan from 2000-2012. From 2008 to 2012 the external debt is constantly increasing.

Domestic Debt

Government debt as a percent of GDP, also known as debt-to-GDP ratio, is the amount of national debt a country has in percentage of its Gross Domestic Product. Basically, Government debt is the money owed by the central government to its creditors. There are two types of government debt: net and gross. Gross debt is the accumulation of outstanding government debt which may be in the form of government bonds, credit default swaps, currency swaps, special drawing rights, loans, insurance and pensions. Net debt is the difference between gross debt and the financial assets that government holds. The higher the debt-to-GDP ratio, the less likely the country will pay its debt back, and more likely the country is to default on its debt obligations.

Domestic Debt of Pakistan

Pakistan recorded a Government Debt to GDP of 60.10% of the country’s Gross Domestic Product in 2011. Historically, from 1994 until 2011, Pakistan Government Debt to GDP averaged 70.62% reaching an all time high of 87.90% in December of 2001 and a record low of 54.90% in December of 2007. Generally, Government debt as a percent of GDP is used by investors to measure a country ability to make future payments on its debt, thus affecting the country borrowing costs and government bond yields.



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