For the past ten years, Pakistan has been devastated by political conflict, reduced levels of Foreign Direct Investment, and a low exportation rate of manufacturers. Because of this, this underdeveloped and impoverished country has been challenged with a difficult economy.
In 2000, then-President of Pakistan Pevez Musharraf implemented a seres of economic reforms that spurs Pakistan's economic revival. GDP growth maintain in the range of 6 to 8 percent from 2004 to 2006. Today, Pakistan is the 27th largest economy in the world in terms of GDP (PPP).
With strong economic growths in the past decade, Pakistan also face the problems of high inflation and unemployment rate. Experts also says that even though Pakistan manage to post strong economic growth, the country is still vulnerable to any shift in global demand, due to its failure to establish a firm export market with other countries.
Pakistan's GDP Forecast
Pakistan is the 27th largest economy in the world acceding to GDP (PPP) and the 48th largest according to GDP (Current prices, US dollars). In 2010, Pakistan's GDP (PPP) was US$ 464.897 billion and GDP (Current Prices, US dollars) of US$ 174.866 billion. By 2011, Pakistan's economy GDP(PPP) will grow by 3.88 percent to US$ 482.91 billion. After which, Pakistan's GDP (PPP) is expected to grow annually by 6.3 - 7.9 percent from 2012 to 2016. By the end of 2016, Pakistan's GDP (PPP) will reach US$ 674.268
Pakistan's GDP (PPP) per capita is expected to see consistent growth for the next 5 years. In 2010, Pakistan's GDP (PPP) per capita was US$ 2790.86. From 2011 to 2016, Mexico's GDP (PPP) per capita will grow annually by 3.7 - 6.2 percent to US$ 3678.48
Pakistan's Unemployment Forecast
In 2010, Pakistan's unemployment rate stood at 6.195 percent, as it had been for the past 2 years. Forecasters expects that unemployment rate to remain constant at 6.195 percent till 2016. With a high population growth, which also means more people entering the workforce every year, the government plans to increase investment in the production of electricity, education and healthcare, and to supply more jobs to the growing labour market.
Pakistan's Inflation Rate & Current Account Forecast
Pakistan has been pegged with high inflation problems in the last decade, averaging 7 to 9 percent, and hitting a record high of 20.775 percent inflation rate in 2009. In 2010, inflation rate (Average Consumer Price Change) for Pakistan is at 11.73 percent. By 2011, inflation rate is expected to rise by 32.14 percent to 15.5 percent. However, experts forecasts that inflation rate will decline in 2012 to 14 percent and from 2014 onwards, inflation rate will maintain at 7 percent.
High inflation in Pakistan is a big threat to the country's growing economy. Rising food and utility prices, and limited wage growth have forced more women to enter the workforce to provide for the family, despite of cultural resistance and domestic abuse over this issue.
Pakistan posted a current account deficit of US$ -3.946 billion in 2010. The country's current account deficit is also the 3rd highest in Asia, after India and Vietnam. However, this figure has shown big improvement from the current account deficit of US$-13.874 billion in 2008. The decline in global demand during 2008 financial crisis for its exports and ongoing internal political instability have led to Pakistan's huge current account deficit.
From 2011 to 2012, the current account deficit is expected to increase by 67.9 percent to US$-5.134 billion from the 2011 figure of US$-3.056 billion. From 2013 to 2016, current account deficit will grow further between 21 to 31.6 percent, and reach US$-12.535 billion by 2016.