Even though Pakistan’s economy is technically categorized as a developing economy, the country is still a global powerhouse. It ranks 22 in the world for PPP, or purchasing power parity, and 45th largest for GDP, or gross domestic products. The economy is centred in cities along the Indus River, including Karachi and Peshawar, which are semi-industrialized. The main exports from Pakistan are textiles, sporting goods, leather items, chemicals, rugs and carpets.
Now that we have the basics down, let’s take a look at the economic outlook for 2021 as Pakistan emerges from the global Covid-19 pandemic and life begins to get back to some semblance of normal.
Pakistan’s GDP before the fiscal year of 2020 that included COVID-19 was 12,580.174 billion rupees, which captured a 1.91% increase in GDP from the 2018 fiscal year to the 2019 fiscal year. The country’s population has been growing slowly but steadily over the previous 20 years and was at roughly 204.7 million in 2019. While internal political instability, unreliable foreign investments and other factors often have a significant impact on the financial growth and stability of Pakistan, as a whole the country has been growing and developing steadily in recent decades.
While the Pakistan GDP grew 1.9% in 2019 and has grown at least a little bit every year for quite some time, it fell by 1.5% in the fiscal year 2020. The pandemic marked the first actual decline in decades, which is in line with most global economies for the year. About half of Pakistanis with jobs either lost their employment or suffered income loss, prompting a full percent increase in the amount of the population living below the poverty line. As many as 40% of households faced food insecurity throughout the pandemic as well.
As with many other countries, the Pakistani government initiated a lockdown to help stop the spread of the disease and introduced a stimulus package totalling about 2.9% of Pakistan GDP 2020. These funds helped citizens get out of poverty and handle food insecurity. Many individuals also transferred money to their friends and family from abroad through channels like Remitbee’s money transfer service as well, which also helped people get through the financial and economic difficulties of the pandemic.
Since Pakistan Day just happened recently, people are looking to the future. The Covid-19 vaccine is becoming more widely available and economies and travel are opening up again. Many economists are forecasting growth for Pakistan’s economy in FY2021, with some signs of recovery already becoming clear. While the economy is currently contending with inflation, experts are saying that it will slowly recover and be back on an upswing by the fiscal year 2023. This will largely be due to private consumption rather than international investment or corporate maneuvering.
The Covid-19 pandemic has brought unprecedented changes to countries around the globe, but recovery is finally on the horizon. People around the world are more aware of the value of their national and local economies now than before the crisis, and experts predict people may see a shift in currencies as things get back to normal over the next year. For now, though, many people are still struggling with the reality of having been out of work or experienced a decrease in income. If you have loved ones abroad or even in Pakistan, Remitbee allows you to transfer money to more than 50 countries.
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