Essay On Pakistan's Economy

WHAT DOES ‘ECONOMY’ MEAN?

Economy is the large set of inter-related production and consumption activities that help in determining how scarce resources are allocated. This is also known as an economic system.

PAKISTAN’S ECONOMY

Agriculture is the main sector of Pakistan's economy in which more than 40% of the population is employed. Cotton, wheat, rice, sugarcane, fruits, vegetables, and tobacco are the chief crops, and cattle, sheep, and poultry are raised. There is also a fishing industry which is main source of revenue. Most of Pakistan's agricultural output comes from the Indus basin. The country is now self-sufficient in food, as vast irrigation schemes have extended farming into arid areas, and fertilizers and new varieties of crops

IMPACT OF FOREIGN DEBT

History shows that there have been only three occasions when Pakistan's balance of trade has recorded a surplus. The first was in 1947-48 when the import requirements of the newly born country were not yet well defined.

Second, in 1950-51, the balance of trade surplus was caused by the Korean War boom leading to an increase in the international prices of Pakistan's major primary commodities. Third, it was the devaluation of Pakistan rupee in May 1972 and diversion of exports from former East Pakistan to foreign markets that had helped achieve a surplus in 1972-73.

In its Annual Report 2012–2013, the State Bank of Pakistan had stated:" The country's public debt is still 63.3 percent of GDP – higher than the ceiling of 60 percent under the Fiscal Responsibility and Debt Limitation Act (FRDL) of 2005. Comparing with other countries, Pakistan's debt is significantly above the average for emerging and low income countries. It also shows that unlike other emerging economies, Pakistan's debt burden is rising. Such mounting debt will have adverse consequences for the economy: it will hold back economic growth;