The economy of a country is true indicator of how well a country is functioning in the global world and particularly various indicators which shows that whether the country is growing or it is at a stagnant point. From the worldwide assessment this is very obvious even for the 1st grade students that the western countries have successively developed economies while on the other hand when we see at the eastern side most of the countries are still developing except for the Asian tigers and some others. Then inside these developing economies there are different levels some of them are rapidly growing while some are growing at a snails pace with their dependence on donor friend’s assistance.
Pakistan stands in the line of developing countries which has enormous resources (most of them are yet to be discovered). Despite being a poor country in the beginning i.e. 1947 its growth rate was far better than the global average but the reckless policies have led to slow down its growth rate in late 1990’s.Later on by introducing various economic reforms they help accelerating the economy whose result can be seen in 2004-2005 that the growth rate was 8.4% which was remarkable and fastest in the region. But being a part of the world economy it is of no wonder and not possible to escape from any business cycles prevailing in the world and especially when Pakistan is one of the important economies of the world and attains an important geographical location.
 This has resulted in the slow down of the growth rate due to the economic crisis of 2008 which led the growth rate to fall from 8.4% to 4.7% along with an ever high inflation rate of 24.4% and a low saving rates and other economic factors, continue to make it difficult to sustain a high growth rate. These economic crises have resulted in taking an aid of more than $100 billion from the international monetary fund to avoid bankruptcy because the donor countries were suffering from financial crisis themselves. Bankruptcy was in its way to operate in Pakistan because of balance of payments deficits. Another reason for this bankruptcy was that the country was spending $26 billion in an expectation to receive the revenues up to $20 billion.
Alongside this the exports show negative trend with an increase in imports. All this resulted in current account deficit. And this was for the first time in time that Pakistan has to take this funding to support its balance of payments deficit. But by October 2007 Pakistan raised its foreign reserves to $16.4 billion. Exceptional policies kept Pakistan’s trade deficit controlled at $13 billion, exports boomed to $18 billion, revenue generation increased to become $13 billion and attracted foreign investment of $8.4 billion. But unfortunately in the start of 2008 the country’s role against the terrorism led to instability resulting in the great decline in FDI from $18 billion to $3.5 billion. Then Pakistan’s debt position became minus due to political instability.
The political instability has always been a fundamental instrument playing its role in Pakistan’s economy to destabilize it. As we can see from the pages of history that as soon a political party takes its position it is uprooted by external forces either by leader’s assassination or by other strategies which end up in imposing martial laws which lead to the stagnation of the economy. This kind of outlook of a country results on the part of foreign investments, hesitation. No one would like to invest in such circumstances where there is a fear that the country would default. Political and economic stability are complements but if we see the case of Pakistan then it is of quite astonishment that both of them are in crisis. Due to these instabilities the GDP has retarded since 2004-2005. This results in the circular debt which is another chronic issue and shows a potential indicator of economic problem.
The government of Pakistan is unable to pay to oil marketing companies and independent power producers which affected both the private and the public sector and led to the shut down of many businesses. The country is facing a shortage of 35000 MW where the per capita consumption is only 15MMBtu against the world average of 68MMBtu and there is a need to increase this level up to 50% of the world level and there should be made the energy availability through other sources like mega wind power projects, bio diesel, bio gas projects and small hydro projects. These indicators have so far shown a fragile economic potential on the part of Pakistan which needed to be strengthen in order to survive in this world. Pakistan although shows a weak economy all together but there are enormous resources that if being utilized efficiently with stable political atmosphere Pakistan will become a strong economy.
Here are some economic indicators with reference to time and their growth path have been shown to analyze by looking at the figures that at what pace the economy has grown over time. The table is as follows:
$ 75 billion
$ 160 billion
$ 168 billion
$ 185 billion
GDP Purchasing Power Parity (PPP)
$ 270 billion
$ 475.5 billion
$ 439 billion
$ 580.6 billion
GDP per Capita Income
$ 450
$ 925
Revenue collection
Rs. 305 billion
Rs. 708 billion
Rs. 990 billion
Rs. 1.05 trillion
Foreign reserves
$ 700 million
$ 16.4 billion
$ 10 billion
$ 14 billion
$ 7.5 billion
$ 18.5 billion
$ 19.22 billion
$ 18.45 billion
Textile Exports
$ 5.5 billion
$ 11.2 billion
KHI stock exchange (100-Index)
$ 5 billion at 700 points
$ 75 billion at 14,000 points
$ 56 billion at 9,000 points
Foreign Direct Investment
$ 1 billion
$ 8.4 billion
$ 5.19 billion
$ 4.6 billion
Debt servicing
65% of GDP
26% of GDP
Poverty level
Literacy rate
Development programs
Rs. 80 billion
Rs. 520 billion
Rs. 549.7 billion
Rs. 880 billion
By looking at the table we have seen that over a decade’s time all the indicators have doub