Past of economic

growth
 First Five Decades
• Pakistan was a middle-class predominantly agricultural country when it
gained independence in 1947.
• Pakistan’s average economic growth rate in the first five decades (1947-
1997) has been higher than the growth rate of the world economy during
the same period
• Average annual real GDP growth rates were 6.8% in the 1960s, 4.8% in the
1970s, 6.5% in the 1980s.
• Average annual growth fell to 4.6% in the 1990s with significantly lower
growth in the second half of the decade.
 1950s and 1960s
• Economic Growth during the 1950s averaged 3.1% per annum, and the decade was
marked by both Political and Macroeconomic instability and a shortage of resources
to meet the nation’s needs.
• After founding the State Bank of Pakistan in 1948, a currency dispute broke out
between Pakistan and India in 1949.Trade relations were strained until the issue was
resolved in mid-1950.
• Pakistan’s economy quickly revitalized under Ayub Khan, with economic growth
averaging 5.82% during his tenure (1958-1969).
• Manufacturing growth rate was 8.51%, far outpacing any other time in Pakistani
history, as Pakistan established its first automobile and cement industries.
• The government also built several dams and focused on agricultural sector.
• Green revolution was started (During Ayub Khan’s regime) and Tax concessions
were offered for investment in less-developed areas.
• As essential development started, Islamabad was made the Capital of Pakistan in
1966.
1950s and 1960s
 1970s and 1980s
• Development Budget was halved because of the Partition of West and East Pakistan.
• During 1970s, Nationalization took place and there was command economy in Pakistan.
• Banks, Insurance Companies, Educational Institutions, Major Heavy Mechanical, Chemical and Electrical
Engineering Industries were immediately Nationalized
• During Zulfiqar Ali Bhutto’s regime, Port Qasim, Pakistan Steel Mills and the Heavy Mechanical Complex
in Taxila with several other cement industries.
• However, economic growth fell 6.8% in 1960s to 4.8% in 1970s during Bhutto’s regime and most
nationalized industries became loss-making because the decisions were not market based. Poverty and
Income Inequality increased and Inflation rate rose, averaging 16% from 1971-1977.
• During General Muhammad Zia-ul-Haq’s regime in 1980s, martial law was imposed in Pakistan.
• Many of the controls on industry were liberalized or abolished and the balance of payments were kept under
control.
• Growth rate rose to an average 6.5% and Pakistan became self-sufficient on basic food stuffs like edible oils.
• Agricultural and Industrial Growth rose. Remittances reached its peak of $3 Billion (1982-83) and there was
direct aid to Pakistan from United States and its allies ($5-7 Billion) to the Afghan Mujahideen through
Pakistan, further uplifting the local economy.
• Pakistan’s Economic Growth Rate was highest at that time.
• Zia’s economic policies became market oriented rather than socialist .
 1990s and 2000s (Till 2017)
• After General Zia-ul-Haq’s death in 1988, Benazir Bhutto and Nawaz Sharif took control of
Pakistan’s Government in 1990s.
• Pakistan’s economy suffered poor governance and growth rates in 1990s, as GDP growth rate
sank to 4% and Pakistan faced persistent fiscal and external deficits, triggering a debt
crisis.Poverty nearly doubled from 18 to 34% causing the HDI to decrease and making Pakistan
one of the less-developed countries.
• The Lahore-Islamabad Motorway was built in the 1990s during Nawaz Sharif’s tenure.
• In 1999, General Pervez Musharaf came and Martial Law was again Imposed in Pakistan.
• Pakistan’s Reserves increased from $1.2 Billion in 1999 to $10.7 Billion in 2004.
• Investment Rate to 23% of GDP and there were Capital Inflows of $14 Billion.
• After Musharaf’s resignation, Asif Ali Zardari took control and Pakistan faced Stagflation
because of unsuitable economic policies.
• Pakistan’s economy slowed down to around 4.09%.
• After Asif Ali Zardari, Nawaz Sharif again took control. In his second tenure, Privatization and
Liberalization took place.
• Pakistan faced energy shortages, hyperinflation, mild economic growth, high debt and a large
budget deficit.