This Is Pakistan | Pakistan Economy (GDP)
The country which is oftenly in the news. For one thing or another yet in the recent times. The country has been a topic of discussion. Because of its rising debt and declining economic growth now. The question is how pakistan ended up hereand is it a debt-trapped economy. Well let’s find that out in this video. To get an accurate answer to ourquestions. We need to start with the economic history of pakistan.
Around 324.00 Usd Billion
In the long-term, the pakistan gdp is projected to trend around 324.00 usd billion in 2022 and 350.00 usd billion in 2023, according to our econometric models.
History Of Pakistan
At the time of its independence in 1947 pakistan was a very poor and predominantly agricultural country. After independence the country took a number of steps to restructure. Its agricultural industry which was to boost the output and exports. Then in the 1950s the government started to focus on industrialization for that. They adopted the soviet-era five-year planning model in the 60s pakistan’s average annual gdp growth rate was 6.8 which was good considering for that time but this growth didn’t last for a long period.
Political Disturbance 1971
Political disturbance which had startedin late 1960s ended with the crisis of 1971 and the consequent separation of the former east pakistan ship the
Country the new government took over during deteriorating economic growth and the country was faced with post-war rehabilitation challenges pakistan suffered from a devastated economy high rate of inflation and stagnant agriculture and industrial sector in addition. They shifted the economic strategy toward nationalization which again impacted private investment in the economy.
Yet in the 80s due to slower economic growth nationalization policy was reversed and the country saw a slight economic growth in the same time period the country’s remittance income increased drastically. However this growth also didn’t last as remittance declined in 1990 the government deficit increased and gdp.
Simultaneously debt to gdp ratio was increasing and the country started to feel the heat of the rising debt so the answer to the question is pakistan in a debt trap is yes the fact is that pakistan’s external debt continues to accumulate.
loans & Depth 2006 to 2022
They Have To Borrow More Dollars To Repay Old Which You May Call It As Debt Trapin This Graph You Can See How Pakistan’s External Debt Has Risen Over The Years And It Has Shot Up From 2015 To Nearly Double.
If You Look At The Last Two Years Of Financial Data Then Pakistan’s Publicdebt Went Past 87 Percent Of Gdp At The End Of 2019 And 20 Up From About 72
Percent Of Gdp At The End Of 2017 And 18
Also The Country’s Total External Debt And Liabilities Rose To 113.8 Billion Dollars In Fiscal Year 2020 From 106.3 Billion Dollars In 2019. This Problem Has Worsened Due To The Pandemic And Low Tax Collection Data Released By The State Bank Of Pakistan Reveals That The Current Government Paid 11.9 Billion Dollars In External Public Debt Servicing During
2019 And 2020 Import, Exports & Depth
7 to 9 billoin pay for depth. This is a huge amount of money that could have been used for other activities such as education health services and for other things pakistan is also unable to increase its exports which remains stuck at 23 to 24billion dollars a year this reduces the foreign reserves of the country as they import more than they export. Also it increases the reliance onremittance money for its foreign reserves.
Imf & Asian Development Loan
Over the years pakistan has obtained loans from international institutions such as imf asian development bank the world bank and from countries such as saudi arabia, uae and china perhaps. The most worrying thing for pakistan is their increasing dependence n chinese loans through the china-pakistan-economic-corridor or the cpec
Project In The Country Cpac
The cpec is part of china’s belt and road initiative which is aiming to connect europe and africa to the chinese mainlandand cpec is considered an important part of this project as it reduces china’s dependency from traveling through strait of malacca. Coming back to cpec as I have said before it’s a multi-billion dollar project aiming to develop pakistan’s. Infrastructure like ports roads railway and power generation projectsin 2020. These projects were worth more than 62 billion dollars even with this massive investment adequate jobs were not created and major work is done by chinese workers and not pakistanis. In recent years many countries including the u.S and many other think tanks have worried about china’s bri projects. Because it has been observed that many countries who accepted these project sare being pushed in debt trap like sri lanka, tajikistan and countries in africa and pakistan. Is not exceptional pakistan has already given china exclusive rights coupled with a tax holiday to run their gwadar port for the next 40 years. So what can pakistan do to improve its economic situation and avoid bank ruptcywell first and the most important thing is that pakistan. Needs is a more aggressive debt restructuring program. Currently the country spends one third of its federal budget on interest of debts and this is not a good sign for a developing country.
Military Budget Of Pakistan
The Pakistan government has announced a defence budget of PKR1. 37 trillion (USD8. 78 billion) for fiscal year (FY) 2021–22. The allocation is a 6.2% increase over the original 2020–21 defence expenditure of PKR1. also the country needs to cut down their military spending. because a large chunk of their budget goes to the defense which does not generate good return sand speaking of military spending pakistan is often criticized for its terror financing and money laundering issues.
Because of this they are in the gray list of financial action task force it is estimated that from 2008 the country could have lost more than 35billion dollars in lost opportunities also the investors are not confident due to country’s gray listing in fatfso the country really needs to focus onunlisting itself from the gray list by taking appropriate action now if we look at the bright side pakistan still has opportunities to grow you see pakistan has a massive population with the average age of their citizens being just 22 years this gives them an advantage in demographic dividend
To know what is demographic dividend.
What Is Considered Middle Class In Pakistan?
The middle class in pakistan can loosely be defined as the section of society that comprises households with a minimum monthly income of rs50,000. A household on average consists of six members.
Pakistan Emerging And Growing Middle Class
Pakistan emerging and growing middle classthis growing population could help the country to improve their productivity and consumer sector already pakistan. Has a growing middle class which could grow beyond 100million in 2025. So it is easy for a country to capitalize itself from the growing middle class. This country also has another advantage which is rising cash flow from remittance even though. It acts like ab rain drain for the country in the long term it is beneficial in the short term in. The end we can say that pakistan still has a chance to catch the train of opportunities with deep structural reforms. Pakistan could come out of this debt trap and move forward towards economic prosperity so what are your views about. Thisc ountry let us know in the comments.
What Is The Percentage Of Middle Class In Pakistan?
According to a recent report of the undp on pakistan national human development report titled, “the three ps of inequality: power, people, and policy,” in 2007–2008, 42 percent of pakistan’s population was middle class which declined to 36 percent by 2018–2019, implying that the middle class is increasingly being .