UNIVERSITY OF MANAGEMENT

AND TECHONLOGY
SIALKOT CAMPUS

Subject: Macroeconomics

Final Project

Submitted By M Husnain Zafar

Student ID: 18012005001

Program: BBA-12

Submitted to Miss Mamona sadaf

 Economic Growth of Pakistan

Graphical Representation of the Economic Growth of Pakistan in last three

decades

Increase in exports by Policies and measures of Poverty alleviation

24% and sell govt., higher production in program, employment rate
sufficiency in the agriculture raised
edible oil sector

GDP of Paksitan
GDP of Paksitan (1988-2018)
10.00%
9.00% Completion of
8.00% democratic tenures,
trust developed,
7.00%
eradication of terrorism
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18
19 19 19 19 19 19 20 20 20 20 20 20 20 20 20 20

Political
Cement industry Global financial Massive Earthquake,
uncertainties, Political unrest,
issue, Sanction crisis destruction of fertile
unusual flood reluctant to invest,
on trade land and agricultural
lack of trust produce, terrorism,
Analysis of the trends in the economic growth of Pakistan
over the period of last three decades (1988-2018)
In 1988, the growth in GDP was at 6.40%, which was moderately high. This was the period
when exports increased by 24% in that time. Furthermore, Pakistan also became self-sufficient
in foodstuffs with the exception of edible oils. A new budget was presented and passed in the
assembly. The growth rate decreased in 1989 to 1990 because the performance of the
economy during the year was adversely affected by political uncertainties, the disturbances in
Karachi and Hyderabad, which disrupted production activity, and unusual floods in Pakistan.
Eventually, the growth rate got increase to a good number of 7.60% in 1992.

This improvement can be attributed partly to the policies and measures taken to deregulate
and liberalize the economy and partly to higher agriculture production. The sharp fall from
1992 until 1993 was because of the regulation in the “cement industry” that owning of CNIC
was made compulsory and 60-70% cement dealers were unregistered (the production halted).
There was also a reason that America had imposed a stricter sanction on Pakistan and the
country that traded with Pakistan because of the cold relationship with India over “Kashmir
issue” and Bombay bombing which was an accusation on Pakistan. In the 90s, international
actors affected the economy of Pakistan like IMF and the WORLD BANK, there was less
economic sovereignty.

(Late 90’s-early 2000) There was stunted growth in this time period. In 1997, the growth rate
became lowest that was 1.70%. This was the period of global financial crisis and when almost
every country was experiencing low growth and in some cases negative growth rate. The lowest
growth started to decrease and in 1999, the growth rate became increasing, and reached a
peak of 4.20% (though still a low growth rate). The military took over in 1999 and the growth
was not substantial during the inception of military regime. Pakistan’s international reputation
was at its lowest ebb as successive agreements concluded with international financial institutes
were not implemented and the locals were also reluctant to invest.

There was a sharp fall from 1999 to 2001; 4.20% to 2.00% respectively. There was political
unrest as well as Mian Muhammad Nawaz Sharif was put behind the bars. Eventually, the
growth rate began to rise and at a higher rate.

(2001-2005) the growth acceleration period, the poverty alleviation program in the previous
decade had borne fruit and the employment level had risen aiding the growth rate to
accelerate. The highest growth rate during the three decades was in 2005 (9.00%) but the rate
fell all of a sudden as Pakistan was hit by a severe natural calamity, earthquake and resulted in
many abnormalities.

Sharp fall in growth rate after 2005, the growth rate declined. Pakistan was struck by a natural
calamity, earthquake which also contributed to the low performance of the growth of the
economy.

The lowest growth rate in this time span was in 2009, which was 0.40%, the greatest
depression. The year 2008 again put Pakistan off track in terms of growth. In agriculture sector,
cotton and rice crops did not perform well and the wheat crop yielded low than last year’s
actual production. The major concern in the country was of terrorism it was on the highest
peak we had bad reputation globally and the private individuals were reluctant in engaging in
any business activity.

Soon after 2010 the growth rate started to stabilize and it kept on increasing and until
2018(5.50%) the rate has not gone negative, the growth rate is not accelerating but is on an
adequate pace, the reasons also include the completion of democratic tenures, trust in the
economy of Pakistan and the gradual eradication of terrorism in the country.

References

http://finance.gov.pk/survey/chapters_17/01-Growth.pdf

http://www.iba.edu.pk/News/speechesarticles_drishrat/Pakistan_Economy_1999_2000_2007_2008_22
_4.pdf

https://country.eiu.com/pakistan

https://tribune.com.pk/story/2036258/2-cnic-condition-causes-decline-cement-sales/

https://en.wikipedia.org/wiki/Terrorism_in_Pakistan

https://en.wikipedia.org/wiki/1993_in_Pakistan  
 Unemployment
Unemployment is countercyclical, meaning that it increases with low economic growth
and decreases when the economy begins to grow. It concerns both developed and
developing countries. Some factors that can affect economic growth and therefore
unemployment rates are, lack of sources, lack of investment, poor educational system,
violence of law, poor governance, energy crisis, etc. The problem of unemployment
gives rise to the problem of poverty. Young people, after a long time of unemployment,
find wrong ways to earn money and so the crime rate also increases. But the most
important factor that affects the economy of a country is how it is governed and lead. It
depends upon the rulers to make policies and implement them to ensure the stability of
the country.

Marshall-Law War of terror in Era of Stagflation

Imposed country after 9/11 due to Corruption

Unemployment Rate of Pakistan

Great Governance
while Soviet-Afghan
(1983-2018) Game
9 Changer CPEC
8
7
6
5 Unemployment Rate in %

4
3
2
1
0
83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15 17
19 19 19 1 9 1 9 1 9 19 1 9 19 20 2 0 2 0 2 0 2 0 2 0 20 20 2 0

Jumped due to interruption Sanctions imposed after Once again Democracy

in Democratic Process NUCLEAR Test 1998 in Country

General Zia-ul-Haq 1983-1988

The unemployment rate during Zia’s time decreased from 3.9% to 3.1%.Pakistan’s
economy recovered significantly due to an increased inflow in foreign aid and
remittances from expatriate workers. Under Muhammad Zia, many of the controls on
industry were liberalized or abolished,due to which more job opportunities were
available, the balance of payments deficit was kept under control, and Pakistan became
self-sufficient, even though it was the period of Soviet-Afghan War and the country
was facing crisis. Out of a total labour force of 11.6 million, 11.2 million were employed
while only 0.4 million were unemployed. The unemployment rate was 1.4% and so this
was a time of high growth and low unemployment due to great governance.

Benazir Bhutto 1988-1989

In this time period, the unemployment rate of Pakistan remained 3.1%, but the GDP
was decreased comparatively.

Nawaz Sharif 1990-1993

Pakistan faced persistent fiscal and external deficits, triggering a debt crisis. Our
exports stagnated and we lost market share in world trade environment because of
which the unemployment rate jumped from 3.1% to 5.9%. Hence a time of high
unemployment and low growth.

Benazir Bhutto 1993-1996

During this time, the unemployment rate was 5%. The lowest it reached was 4.7% and
the highest it got was 5.4%. Both parties argued that it was due to interruptions in the
democratic process.

Nawaz Sharif 1997-1999

Pakistan's economy in the 1990s suffered from poor governance and low growth as it
alternated between the Pakistan People’s Party under Benazir Bhutto and the Pakistan
Muslim League led by Nawaz Sharif. The GDP growth rate sank to 4 percent and
Pakistan faced debt crisis. It was a difficult time to survive in the international trade
because of the sanctions imposed after the nuclear test in 1998. Poverty nearly
doubled from 18 to 34 percent. The labour force increased nearly three times to 35.1
million, out of this 33.1 million were employed while nearly 2 million were
unemployed. The unemployment rate was 5.7%. While both Nawaz Sharif and Benazir
Bhutto governments supported economic liberalization and privatization policies, neither
were able to successfully implement them, and so this was a time of low growth and
high unemployment.

General Pervez Musharraf 1999-2008

Pervez Musharraf became the President of Pakistan in 2001 and worked to address the
challenges of heavy external and domestic indebtedness, high fiscal deficit and low
revenue generation capacity, rising poverty and unemployment, and a weak balance of
payments with stagnant exports. Approximately 11.8 million new jobs were created but
they were still not enough to decrease the rate of unemployment. It was an era of
autocratic government and we faced the highest unemployment rate of 8.3%. What
basically sent Pakistan in great crisis was 9/11. Target killing and bomb blasting was
very frequent during this time and caused instability in the governance which had a
negative impact on economy, unemployment and general development of the country.

Asif Zardari 2008-2013

After Musharraf's resignation in 2008, the PPP government once again resumed control
of Pakistan. The administrations of Asif Ali Zardari and Syed Yousaf Raza Gillani
oversaw a dramatic rise in violence, corruption, and unsustainable economic policies
that forced Pakistan to re-enter an "Era of Stagflation”. The unemployment rate was
6.8%, which was better than the last era but still high. Analyzing the stagflation problem,
the PIDE observed that a major cause of the continuous era of stagflation in Pakistan
was a lack of coordination between fiscal and monetary authorities.

Nawaz Sharif 2013-2018 (Pml N)

In 2013, Nawaz Sharif returned to inherit an economy crippled by energy shortages,
hyperinflation, mild economic growth, high debt, and a large budget deficit. Shortly after
taking office, Pakistan embarked on a $6.3 billion IMF Extended Fund Facility, which
focused on reducing energy shortages, stabilizing public finances, increasing revenue
collection, and improving its balance of payments position. Lower oil prices, better
security, higher remittances, and consumer spending spurred growth toward a seven-
year high of 4.3 percent in the fiscal year 2014 to 2015. Pakistan restored
macroeconomic stability, improved its credit rating, boosted growth and unemployment
rate decreased to 6%.

In 2016, Nawaz Sharif inaugurated “The China-Pakistan Economic Corridor” (CPEC).

Sharif stated that it would serve as a game changer for Pakistan and will bring peace
and prosperity. He stated that it would help in elimination of poverty and unemployment.
The rate of unemployment has dropped from 6.8% to 5.9% but has been stuck to this
since 2014.

Imran Khan 2018

The unemployment rate in the first year of Khan’s government is 6.1%. According to the
PM’s statement, there will be a lot of job opportunities in the future for the unemployed.
References
https://en.wikipedia.org/wiki/Economic_history_of_Pakistan

https://tribune.com.pk/story/1741689/2-economic-expansion-pakistan-facing-jobless-
growth/

https://www.dawn.com/news/1280710

https://knoema.com/atlas/Pakistan/Unemployment-rate