Economy of Pakistan

Economy of Pakistan

Karachi, the industrial capital of Pakistan
Currency	Pakistani rupee (₨) (PKR)
Fixed exchange rates	1 USD = 280 PKR
Fiscal year	1 July – 30 June
Trade organisations	ECO, SAFTA, WTO, AIIB, ADB, SAARC OIC
Country group	Developing economy Lower-middle income economy
Statistics
Population	257,390,405 (2026)
GDP	$410.5 billion (nominal; 2026) $1.76 trillion (PPP; 2026)
GDP rank	41st (nominal; 2025) 26th (PPP; 2025)
GDP growth	-0.2% (2023) 2.5% (2024) 2.7% (2025) 3.6% (2026 forecast)
GDP per capita	$1,710 (nominal; 2025) $7,120 (PPP; 2026)
GDP per capita rank	161st (nominal; 2025) 142nd (PPP; 2025)
GDP by sector	Agriculture: 23.17% Industry: 18.41% Services: 58.42% (FY 2023)
GDP by component	Household consumption: 82.0% Government consumption: 11.3% Investment in fixed capital: 14.5% Investment in inventories: 1.6% Exports of goods and services: 8.2% Imports of goods and services: −17.6% (2017 est.)
Inflation (CPI)	4.5% (2025)
Population below poverty line	88% on less than $8.30/day (2018) 21.6% on less than $3.65/day (2025) 2% in extreme poverty less than $1.90 (2025) 8% (rural); 0.3% (urban)
Gini coefficient	31.6 medium (2018, World Bank)
Human Development Index	0.544 low (2025) (168th) 0.364 low (2023, IHDI 138th)
Labour force	78,863,000 (2025)
Labour force by occupation	Agriculture: 37.4% Industry: 25.4% Services: 37.2% (2021)
Unemployment	Template:Increasenegative 6.9% (2025)
Main industries	Textiles Apparel Food processing Pharmaceuticals Surgical instruments Construction materials Fertilizer Overseas remote freelancing Seafood Luxury products Technology Paper products Automotive Telecommunication Marble Glass manufacturing Shipbreaking Ornamentations Banking Energy Precious minerals & metals Defense industry Media Education Tourism Financial services Human resources
External
Exports	$40.69 billion (2025)
Export goods	Textiles: $16,301 million Food: $7,082 million Chemicals and pharmaceuticals: $1,421 million Leather goods: $877 million Sports goods: $439 million Petroleum: $553 million
Main export partners	China 8.7% United Arab Emirates 6.7% United Kingdom 6.5% Germany 4.9% Spain 4.7% Netherlands 4.4% United States 17.5% Italy 3.6% (2024 est.)
Imports	$78.02 billion (2025)
Import goods	Petroleum: 15,162 million Agriculture and other chemicals: $8,944 million Machinery: $7,406 million Food: $7,111 million Metal: $4,668 million Textile: $3,890 million Transport: $1,621 million
Main import partners	China 25.4% United Arab Emirates 11.9% Saudi Arabia 8.5% Singapore 4.6% Indonesia 4.5% Kuwait 3.4% Russia 2.0% United States 3.6% (2024 est.)
FDI stock	$31.540 billion Abroad: $1.870 billion (31 Dec 2021)
Current account	1.8 billion US$ (FY 2025)
Gross external debt	Template:Increasenegative $131 billion (2025)
Public finances
Public debt	Template:Decreasepositive 61.4% of GDP (Jun 2024)
Budget balance	Template:Decreasepositive −5.6% of GDP (FY 2024)
Revenues	12.5% of GDP; 13,269 billion PKR or $47 billion (FY 2024)
Expenses	Template:Increasenegative 19.3% of GDP; 20,476 billion PKR $72 billion (FY 2024)
Economic aid	$2.6983 billion (2021)
Credit rating	Standard & Poor's: CCC+ (long term) C (short term) Outlook: stable Moody's: Caa2 Outlook: positive Fitch: B− (April 2025) Outlook: stable
Foreign reserves	$20 billion (2025)
All values, unless otherwise stated, are in US dollars.

The economy of Pakistan is classified as a developing economy. It is the 26th-largest economy by GDP (PPP) and the 41st-largest in terms of nominal GDP in the world. In terms of per capita income, the country ranks 161st by GDP (nominal) and 142nd by GDP (PPP), according to the International Monetary Fund (IMF) in 2025.

In its early years, the economy of Pakistan relied heavily on private industries. The nationalization of a significant portion of the sector, including financial services, manufacturing, and transportation, began in the early 1970s under Zulfikar Ali Bhutto. During the regime of Zia-ul Haq in the 1980s, an Islamic model of economy was adopted, outlawing economic practices forbidden in Sharīʿah. The economy started privatizing again in the 1990s. Pakistan was classified as a semi-industrial economy for the first time in the late 1990s, albeit an underdeveloped country with a heavy dependence on agriculture, particularly the textile industry relying on cotton production.

Pakistan is presently recovering from a major economic crisis and undergoing economic liberalization, including the privatization of all government corporations, aimed at attracting foreign investment and reducing budget deficits. As of 11 February 2026, the Governor of the State Bank of Pakistan stated that the economy was projected to grow between 3.75% and 4.75% in fiscal year 2026, exceeding a recent IMF forecast. The central bank kept its policy rate at 10.5% following earlier reductions, and projected the current account deficit to remain within 0–1% of GDP, while emphasizing the need for continued structural reforms to sustain growth.

The economic growth centers in Pakistan are located along the Indus River; these include the diversified economies of Karachi and major urban centers in Punjab (such as Faisalabad, Lahore, Sialkot, Rawalpindi, and Gujranwala), alongside less developed areas in other parts of the country. In recent decades, regional connectivity initiatives such as the China-Pakistan Economic Corridor (CPEC) have emerged as pivotal contributors to infrastructure and energy development, with long-term implications for economic stability. Primary export commodities include textiles, leather goods, sports equipment, chemicals, and carpets/rugs.

Economic history

Main article: Economic history of Pakistan

Inception

In the late 1940s, upon its establishment, Pakistan had an agrarian-based economy. Agriculture constituted 53% of the country's GDP in 1947 and slightly increased to 53.2% in 1949–50. With a population of approximately 30 million, including around 6 million residing in urban areas, about 65% of the labor force was engaged in agriculture. The agricultural sector played a crucial role, contributing to 99.2% of exports and making up nearly 90% of foreign exchange earnings.

Despite possessing significant land and mineral resources in both East and West Pakistan, including natural gas, crude oil, coal, limestone, and marble, Pakistan faced numerous challenges. In 1950, its per capita income was around $360 (in 1985 international dollars), and the literacy rate was only 10%. The nation encountered a lack of economic infrastructure, financial resources, and an industrial foundation, particularly with poverty rates ranging from 55% to 60% in the West Pakistan region.

Due to limited capital in the small private sector, the government opted to focus on the public sector to foster economic and industrial development. In the fiscal year 1949–50, Pakistan recorded a national savings rate of 2%, a foreign savings rate of 2%, and an investment rate of 4%. Manufacturing contributed 7.8% to the GDP, while services, trade, and other sectors accounted for a significant 39%, reflecting a policy centered around import-substituting industrialization. The trade balance of payments indicated a deficit of 66 million rupees (Rs) during the period spanning 1949/50 to 1950/51.

1950s

The 1950s marked the initiation of planned development in Pakistan, with the introduction of the Colombo Plan in 1951 leading to a series of Five-Year Plans from 1955 to 1998. Concurrently, a Ten-Year Perspective Plan was implemented, complemented by a rolling Three-Year Development Plan.

During the 1950s, Pakistan pursued a policy of import-substituting industrialization. Notably, the Korean War (1950–1953) brought substantial merchant profits to Pakistan's public and emerging private sectors, fueling industrialization.

In 1952, Pakistan imposed bans on the imports of cotton textiles and luxury goods, followed by comprehensive import regulations in 1953, propelling the country into the ranks of the fastest-growing nations. However, biased policies against agriculture and unfavorable trade terms between agriculture and industry led to a decline in the annual growth rate of agriculture.

By the late 1950s, Pakistan achieved self-sufficiency in cotton textiles, emphasizing export development. The influx of US military and economic aid amounting to US$500 million during 1955–58 contributed to Pakistan's growth reliant on foreign aid.

In 1959, after a military coup d'état in 1958, the martial law regime introduced export bonus vouchers as import licenses and exempted certain goods from licensing. During this period, Pakistan faced a worsening trade balance, with deficits increasing from −831 million Rupees in 1950/51 to −1043 million rupees in 1959/60.

Economically, agriculture grew at an annual rate of 1.6%, while manufacturing expanded impressively at 7.7% per annum during the 1950s. In the fiscal year 1959–60, the Per Capita Gross National Product (GNP) stood at Rs. 355 in West Pakistan and Rs. 269 in East Pakistan, indicating a growing economic disparity between the two regions.

1960s

In the 1960s, amid a substantial influx of American aid, Pakistan enjoyed political stability, fostering robust economic growth. Poverty, measured by the poverty headcount ratio, fluctuated from nearly 50% in the early 1960s to 54% in 1963–64.

During the 1960s, Pakistan achieved an impressive annual agricultural growth rate of 5%, driven by substantial investments in water resources, increased farmer incentives, mechanization, greater use of fertilizers and pesticides, and expanded cultivation of high-yielding rice and wheat varieties in the Green Revolution.

Large-scale manufacturing experienced significant growth, expanding at a remarkable rate of 16% per annum from 1960/61 to 1964/65, fueled by protective measures for domestic industries, including export subsidies.

However, the Pakistan-India War of 1965 led to reduced foreign economic assistance, impacting the growth rate of large-scale manufacturing. From 1965 to 1970, this sector grew at a comparatively lower rate of 10% per annum.

Despite challenges, Pakistan achieved an impressive average annual GDP growth rate of 6.7% throughout the 1960s. In the fiscal year 1969–70, the poverty incidence rate decreased to 46%. Per Capita GNP was Rs. 504 in West Pakistan and Rs. 314 in East Pakistan, indicating a widening regional economic disparity.

1970s

The economic landscape in the early 1970s witnessed growing disparities between East and West Pakistan, leading to East Pakistan's declaration of independence and the emergence of Bangladesh in 1971. Subsequently, Pakistan underwent notable transformations in both its political and economic spheres.

Under martial law authorities, amidst challenging macroeconomic conditions, the socialist Pakistan People's Party gained empowerment. This period grappled with numerous economic challenges, including a surge in poverty incidence to 55% during 1971–72. Pakistan also confronted heightened import costs due to the global oil price shock in October 1973, a severe global recession from 1974 to 1977, cotton sector failures in 1974–75, pest infestations affecting crops, and massive floods in 1973, 1974, and 1976–77.

One significant economic issue during this time was high inflation, with prices increasing by an average of 15% per annum between 1972 and 1977. The fiscal deficit/GDP ratio averaged 8.1% during 1973–77, indicating substantial fiscal challenges. Trade imbalances were apparent, with trade deficits rising from US$337 million in 1970–71 to US$1,184 million in 1976–77.

The military coup d'état of 1977, leading to the establishment of a martial law regime that initiated denationalization, deregulation, and privatization policies. Agriculture experienced modest growth at a rate of 2.4% per annum, while large-scale manufacturing expanded at a rate of 5.5% per annum during the 1970s.

Large and medium-scale private manufacturing played a significant role, contributing 75% of the total value-added and investment in manufacturing during the 1970s. The remaining 25% of value-added came from small-scale manufacturing.

Overall, this period was marked by significant political and economic changes, driven by challenges posed by economic disparities, political shifts, and efforts to address issues such as inflation, fiscal deficits, and trade imbalances.

1980s

The 1980s brought substantial changes to Pakistan's economic landscape, moving away from the nationalization policies of the 1970s and fostering private sector industrial investment, which greatly contributed to robust economic growth. Notable developments in this era included a drop in the poverty headcount ratio to 29.1% in 1986–87, showcasing a decline in poverty incidence. The unemployment rate exhibited a positive trend, decreasing from 3.7% in 1980 to 2.6% in 1990.

Between 1985 and 1988, the government endeavored to implement an Islamic interest-free banking system, introducing business partnerships based on profit and loss sharing. The national savings/GDP ratio reached a notable 16% in 1986–87, largely due to significant worker remittances from the Middle East. Despite this growth, challenges emerged, including negative public savings and a declining public investment/GDP ratio throughout the 1980s.

To address increasing budget deficits in the early 1980s, the government heavily relied on non-bank domestic borrowing, resulting in substantial domestic debt growth. Consequently, the public debt/GDP ratio surged to 77.1% in 1988, 81.9% in 1989, and 82.6% in 1990, leading to significant interest payments and persistent fiscal deficits.

In 1985, democracy was restored in Pakistan, marking a pivotal political development. The country experienced a commendable average annual GDP growth rate of 6.3% between 1980 and 1990. The 1980s saw a surge in manufacturing exports, with an annual large-scale manufacturing growth rate of 8.8%, and solid growth in agriculture, with an annual agricultural growth rate of 5.4%.

These highlights underscore a transformative and recovering economic period in the 1980s, characterized by a shift in economic policies, improved fiscal performance, and substantial progress in poverty reduction and employment. The era also witnessed efforts to align financial practices with Islamic principles and significant economic growth in the manufacturing and agricultural sectors.

1990s

The 1990s posed a formidable economic landscape for Pakistan, marked by a series of challenges and developments. Declining worker remittances and escalating external deficits set the tone for economic strains. Simultaneously, the decade witnessed the second-worst inflation in Pakistan's history, driven by diminishing GDP growth rates. Unemployment surged, reaching 5.9% in 1991 and escalating further to 7.2% in 2000.

Pakistan's external debt tripled, soaring to US$30 billion by 1995. The external debt/GDP ratio rose from 42% to 50%, accompanied by increases in the external debt/exports ratio (from 209% to 258%) and the debt service ratio (from 18% to 27%). A deteriorating external debt profile led to a rise in domestic debt, reaching Rs. 909 billion, and a domestic debt/GDP ratio of 42%.

The late 1990s witnessed a severe debt crisis, with the public debt/GDP ratio skyrocketing from 57.5% in 1975–77 to 102% in 1998–99. The public debt/revenues ratio surged to 624%, and the interest payments/revenues ratio reached 42.6%, rendering Pakistan's public debt unsustainable. Concerns over external debt default emerged in 1996 and 1998, triggered by Western economic sanctions in response to Pakistan's nuclear tests in May 1998, causing massive capital flight.

Despite these challenges, Pakistan managed to sustain an agricultural growth rate of 4.4% per annum and a large-scale manufacturing growth rate of 4.8% per annum throughout the 1990s. However, the era witnessed a significant increase in poverty incidence, reaching 30.6% in 1998–99. The decade encapsulated a complex economic narrative, as Pakistan navigated external debt burdens, fiscal imbalances, inflation, and rising unemployment. Amid these difficulties, there were positive aspects, including growth in key sectors like agriculture and manufacturing. Nonetheless, the 1990s also brought forth a looming threat of debt default, magnified by economic sanctions in response to nuclear tests.

2000s

The 2000s witnessed a period of substantial economic challenges and transformations for Pakistan. The impact of high public debt gained prominence, identified by the official Debt Reduction and Management Committee in 2001, contributing to a decline in the growth rate to less than 4% per annum. Despite an initial upturn in the growth rate, the decade unfolded with persistent macroeconomic crises. Although achieving a noteworthy growth rate of 8.6% in 2004–05, subsequent years were marred by a series of setbacks, including a growth slowdown, low growth, high inflation, an energy crisis, and worsening fiscal and balance of payments positions.

The economic landscape reflected the complexities faced by the population, illustrated by a rise in poverty incidence to 34.5% in 2000–01. However, a subsequent decrease to 22.3% in 2005–06 offered a nuanced perspective on the decade's economic trajectory. The unemployment rate saw fluctuations, rising to 7.8% in 2002 but later declining to 5% by 2008.

Efforts to enhance education and literacy rates were evident as adult literacy stood at 55% in 2007–08. Nevertheless, challenges persisted, and economic crises hit Pakistan in 2008, primarily influenced by the 2008 financial crisis. Despite these adversities, economic growth in 2009–2010 reached a respectable 4.1%, with positive contributions from various sectors, including a 2% growth in agriculture, 4.9% growth in industrial output, 4.4% growth in large-scale manufacturing, and a 4.6% expansion in the services sector.

By March 2010, public debt had accumulated to Rs. 8,160 billion, with a total public debt/GDP ratio of 56% and a foreign-currency denominated debt/GDP ratio of 25%. Amid these economic dynamics, Pakistan underwent a structural transition. The GDP share of agriculture declined from 53% in 1947 to 21.2% in 2010, while the GDP share of industry rose from 9.6% in 1949–50 to 25.4% in 2010. Additionally, the GDP share of the services sector increased from 37.2% in 1950 to 53.4% in 2010. The 2000s encapsulated a multifaceted economic narrative for Pakistan, marked by challenges, crises, and significant structural shifts, reflecting the nation's resilience and adaptability.

In late 2021, Pakistan entered a severe economic crisis as inflation surged, the rupee plunged in value, gas supplies dried up, foreign reserves declined and debt increased significantly.

Data

Gross domestic product (GDP)

See also: List of Pakistani provinces by gross domestic product

The table below displays key economic indicators from 1980 to 2025. Inflation rates below 5% are highlighted in green.

Year	GDP (Billion US$ PPP)	GDP per capita (US$ PPP)	GDP (Billion US$ nominal)	GDP per capita (US$ nominal)	GDP growth (Real)	Inflation rate (Percent)	Unemployment (Percent)	Government debt (% of GDP)
1980	75	950.0	38.6	418.9	6.9%	11.9%	n/a	n/a
1981	87	1,072.8	45.7	481.3	6.2%	11.9%	n/a	n/a
1982	100	1,190.0	49.9	511.0	7.6%	5.9%	n/a	n/a
1983	110	1,283.6	46.6	463.7	6.8%	6.4%	3.9%	n/a
1984	119	1,345.3	50.6	489.8	4.0%	6.1%	3.8%	n/a
1985	133	1,468.4	50.6	476.7	8.7%	5.6%	3.7%	n/a
1986	145	1,551.3	51.8	475.3	6.4%	3.5%	3.3%	n/a
1987	157	1,638.5	54.2	483.9	5.8%	4.7%	3.1%	n/a
1988	173	1,759.4	62.4	543.1	6.4%	8.8%	3.1%	n/a
1989	188	1,868.3	65.0	552.0	4.8%	7.9%	3.1%	n/a
1990	204	1,970.1	65.3	538.4	4.6%	9.1%	3.1%	n/a
1991	222	2,094.8	74.2	598.4	5.4%	12.6%	5.9%	n/a
1992	244	2,211.1	79.3	614.2	7.6%	4.8%	5.9%	n/a
1993	255	2,252.4	83.4	633.6	2.1%	9.8%	4.7%	n/a
1994	272	2,341.1	84.6	622.8	4.4%	11.3%	4.8%	64.8%
1995	292	2,449.6	98.9	709.9	5.1%	13.0%	5.4%	58.0%
1996	317	2,594.8	103.3	723.5	6.6%	10.8%	5.4%	58.2%
1997	328	2,620.8	101.8	696.4	1.7%	12.8%	6.1%	58.5%
1998	343	2,678.9	101.4	677.0	3.5%	6.8%	5.9%	59.5%
1999	363	2,765.6	96.0	626.5	4.2%	5.7%	5.9%	67.2%
2000	385	2,855.1	99.4	630.3	3.9%	3.6%	7.8%	68.4%
2001	408	2,916.7	96.8	602.0	3.7%	4.4%	7.8%	72.2%
2002	425	2,995.0	98.2	593.9	2.4%	3.5%	8.3%	67.6%
2003	456	3,119.8	112.5	666.1	5.6%	3.1%	8.3%	62.7%
2004	505	3,376.5	132.2	767.8	7.7%	4.6%	7.7%	56.3%
2005	562	3,722.9	145.2	842.0	7.5%	9.3%	7.7%	52.3%
2006	612	3,986.8	161.9	961.4	5.6%	7.9%	6.2%	48.4%
2007	661	4,244.6	184.1	1,048.4	5.5%	7.8%	5.2%	47.1%
2008	704	4,362.9	202.2	1,124.0	5.0%	12.0%	5.2%	51.9%
2009	715	4,240.5	187.1	1,186.5	0.4%	19.6%	5.5%	52.8%
2010	740	4,283.3	196.7	1,122.7	2.6%	10.1%	6.0%	54.5%
2011	780	4,403.0	230.6	1,325.8	3.6%	13.7%	6.0%	52.8%
2012	820	4,516.4	250.1	1,364.8	3.8%	11.0%	6.0%	56.7%
2013	866	4,655.3	258.7	1,378.6	3.7%	7.4%	6.0%	57.9%
2014	912	4,786.2	271.4	1,428.4	4.1%	8.6%	6.0%	57.1%
2015	956	4,893.3	299.9	1,550.5	4.1%	4.5%	5.9%	57.0%
2016	1,004	5,016.6	313.6	1,566.6	4.6%	2.9%	5.9%	60.8%
2017	1,069	5,212.2	339.2	1,653.4	4.6%	4.1%	5.8%	60.9%
2018	1,130	5,387.2	356.2	1,698.0	6.1%	3.9%	5.8%	64.8%
2019	1,163	5,434.3	321.1	1,500.7	3.1%	6.7%	6.9%	78.7%
2020	1,186	5,435.7	300.4	1,376.5	-0.9%	10.7%	6.6%	80.8%
2021	1,285	5,774.5	348.5	1,565.6	5.8%	8.9%	6.3%	74.7%
2022	1,462	6,440.9	374.8	1651.3	6.2%	12.2%	6.2%	77.3%
2023	1,512	6,530.9	337.8	1,459	-0.2%	29.2%	8.5%	78.2%
2024	1,587	6,724	373.1	1,581	2.5%	Template:Increasenegative23.4%	8.2%	70.1%
2025	1,672	6,951	n/a	n/a	2.6%	Template:Increasenegative5.1%	8.0%	Template:Increasenegative73.6%

Stock market

Main article: Pakistan Stock Exchange

Statue of a bull outside the Islamabad Stock Exchange

In the first four years of the twenty-first century, Pakistan's KSE 100 Index was declared the best-performing stock market index in the world by the international magazine "Business Week". The stock market capitalization of listed companies in Pakistan was valued at $5,937 million in 2005 by the World Bank. On 11 January 2016, with the aim of reducing market fragmentation and creating a strong case for attracting strategic partnerships necessary for providing technological expertise, all three stock exchanges, including Karachi Stock Exchange, Lahore Stock Exchange, and Islamabad Stock Exchange, were inducted into a unified Pakistan Stock Exchange.

In May 2017, the American provider of stock market indexes and analysis tools, MSCI, confirmed that the Pakistan Stock Exchange (PSX) had been reclassified from Frontier Markets to Emerging Markets in its semi-annual index review. The Pakistan Stock Exchange also successfully navigated through the initial COVID-19 induced economic downturn and earned the title of being the 'best Asian stock market and fourth best-performing market across the world in 2020.' The PSE-100 index continued to climb throughout the year. Nearly 40 percent growth in the PSE-100 Index in FY 2021 was driven by the government's large stimulus package, the central bank's stable policy rate, an uptick in large scale manufacturing, improvement in external accounts, and reforms introduced by the Security and Exchange Commission of Pakistan (SECP) and PSX in the wake of the COVID-19.

PSX 100 index growth rate over the previous years is as follows:

List	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024
PSX 100 index growth %	-10.8	-41.7	35.7	28.5	10.4	52.2	41.2	16.0	9.8	23.2	-10.0	-19.1	1.5	37.6	-12.3	-0.2	89.2

The sales of all non-financial companies surged to Rs 16,815 billion in the fiscal year 2023, marking a substantial increase of Rs 1,864 billion compared to the preceding year. However, the net profit margin of all companies declined to 5.98% in FY23 from 6.34% in FY22. Return on assets (ROA) and return on equity (ROE) of all companies also dropped to 6.05 percent and 17.76 percent respectively in FY23. The key statistics for the last six years of all public and private non-financial companies listed at the Pakistan Stock Exchange are provided in the following table:

Financial analysis of companies (non-financial) (billion rupees)

List	2018	2019	2020	2021	2022	2023
Total assets	8,811	10,097	10,755	12,201	15,685	17,549
Total liabilities	5,574	6,610	7,029	7,869	10,568	11,346
Total sales	7,662	8,811	7,999	9,437	14,568	16,815
Profit before tax	608	612	480	1,011	1,439	1,624
Profit after tax	427	413	320	749	924	1,005
%
Net profit margin	5.57	4.68	4.00	7.93	6.34	5.98
Return on assets	5.19	4.36	3.07	6.52	6.63	6.05
Return on equity	13.65	12.27	8.87	18.59	19.56	17.76
Earnings per share	4.43	4.17	3.15	7.07	8.31	8.32

Informal economy

The informal economy in Pakistan comprises economic activities and assets that are not fully captured by formal regulation, taxation, or national accounts. Estimates of its size vary according to methodology and definitions, but multiple sources indicate that the informal sector remains a substantial component of the country’s economic structure. A Dawn analysis noted that the documented economy was estimated at about US $340 billion in 2023, whereas the informal economy was projected at roughly US $457 billion, indicating that the informal economy may exceed the formal economy in overall size.

According to a recent labour force survey, 72.1% of non-agricultural employment was classified as informal in 2024–25, with informal work particularly prevalent in rural areas. The informal economy in Pakistan includes a wide range of activities such as unregistered manufacturing, retail, construction, transport, domestic work, and small enterprises. While it provides livelihoods for many households, its unrecorded nature complicates taxation and regulation, and policymakers have periodically highlighted the challenges and fiscal implications of informality.

Households also accumulate physical commodities such as gold and jewellery as part of their saving strategies; a significant portion of savings in Pakistan resides in informal instruments and physical assets, including gold, which are not entirely captured by formal statistics. Historical estimates once suggest Pakistanis might hold 3,000 to 5,000 tonnes of gold, indicating a possible range of US $40 billion to US $70 billion in household gold wealth as of 2025.

Middle class

See also: Labour force of Pakistan

The Dawood Centre in Karachi, M.T. Khan Road

As of 2017, according to the Wall Street Journal, citing estimates largely based on income and the purchase of consumption goods, had suggested that as many as 42% of Pakistan's population may now belong to the upper and middle classes. If these numbers are correct, or even indicative in any broad sense, then 87 million Pakistanis belong to the middle and upper classes, a population size which is larger than that of Germany. Official figures also show that the proportion of households that own a motorcycle and washing machines has grown impressively over the past 15 years. Furthermore, the IBA-SBP Consumer Confidence Index recorded its highest-ever level of 174.9 points in January 2017, showing an increase of 17 points from July 2016.

Separately, consumer financing recorded at Rs. 179 billion during FY 2022. Auto finance continued to be the dominant segment, followed by house building, which showed remarkable growth after the Mera Pakistan Mera Ghar scheme initiated by the State Bank of Pakistan in December 2020.

Poverty alleviation expenditures

Main article: Poverty in Pakistan

The Pakistan government spent over 1 trillion rupees (about $16.7 billion) on poverty alleviation programs during the past four years, reducing poverty from 35% in 2000–01 to 29.3% in 2013 and further to 17% in 2015. Rural poverty remains a pressing issue, as development in those areas has been significantly slower than in major urban areas.

However, according to a World Bank report released in June 2025, around 45% of Pakistan's population was living below the poverty line. The updated figure was based on revised poverty thresholds and survey data from 2018 to 2019. The report also noted a sharp rise in extreme poverty, with the proportion increasing from 4.9% to 16.5%. As of 2025, the World Bank cautioned that over 10 million additional individuals in Pakistan faced the looming threat of descending into poverty.

Employment

The high population growth in the past few decades has led to a significant number of young people entering the labor market. Although Pakistan is among the six most populous Asian nations, excessive red tape in the past made firing from jobs, and consequently hiring, difficult. Significant progress in taxation and business reforms has ensured that many firms are no longer compelled to operate in the underground economy.

Government revenues and expenditures

Main article: Taxation in Pakistan

Clifton in Karachi

Although the country is a Federation with constitutional division of taxation powers between the Federal Government and the four provinces, the revenue department of the Federal Government, the Federal Board of Revenue, collects more than 80% of the entire national tax collection. The government's revenue streams primarily stem from two sources: taxation and non-tax revenue. Taxation, which includes income tax, sales tax, and customs duties, constitutes a substantial portion of revenues, bolstering both federal and provincial government finances. Non-tax revenue sources, such as mark-up from state enterprises, surplus profits from the State Bank of Pakistan, and royalties on oil and gas, further contribute significantly to the fiscal framework.

Conversely, government expenditures are strategically allocated across multiple sectors, including defense, social services, infrastructure development, and debt servicing. Current expenditures, covering operational costs, interest payments, pensions, and other obligations, are carefully balanced against development expenditures aimed at fostering long-term growth and progress. The challenge of achieving equilibrium between revenue generation and expenditure allocation leads to budgetary deficits that can necessitate borrowing to bridge the gap.

The data has been sourced from the Ministry of Finance.

Consolidated federal and provincial fiscal operations (amounts in billion PKR)

List	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY2024	FY 2025
Total revenue	1,499	1,851	2,078	2,253	2,567	2,982	3,637	3,931	4,447	4,937	5,228	4,901	6,272	6,903	8,035	9,634	13,269	17,997
Tax revenue	1,065	1,317	1,473	1,699	2,053	2,199	2,565	3,018	3,660	3,969	4,467	4,473	4,748	5,272	6,755	7,819	10,085	12,723
FBR taxes	1,008	1,161	1,327	1,558	1,883	1,946	2,255	2,590	3,113	3,368	3,842	3,830	3,998	4,764	6,143	7,169	9,311	11,744
Total expenditure	2,277	2,531	3,007	3,447	3,936	4,816	5,026	5,388	5,796	6,801	7,488	8,346	9,649	10,307	13,295	16,155	20,476	24,166
Fiscal deficit	777	680	929	1,194	1,370	1,834	1,389	1,457	1,349	1,864	2,260	3,445	3,376	3,403	5,260	6,521	7,207	6,168
As % of GDP
Total Revenue	14.1	14.0	14.0	12.3	12.8	13.3	14.5	14.3	13.6	13.9	13.3	11.2	13.2	12.4	12.0	11.4	12.5	15.7
Tax revenue	9.9	9.1	9.9	9.3	10.2	9.8	10.2	11.0	10.4	10.4	10.8	9.7	9.3	9.4	10.1	9.2	9.5	11.1
Total expenditure	21.4	Template:Decreasepositive19.2	20.2	18.9	21.4	21.5	20.0	19.6	17.7	19.1	19.1	19.1	20.3	18.5	19.9	19.1	19.3	21.1
Fiscal deficit	7.3	Template:Decreasepositive5.2	6.2	6.5	8.8	Template:Decreasepositive8.2	5.5	5.3	4.1	5.2	5.8	7.9	7.1	6.1	7.9	7.7	6.8	5.4

Currency system

Main article: Pakistani rupee

Rupee

The basic unit of currency is the rupee, ISO code PKR, and abbreviated Rs, which is divided into 100 paisas. Currently, the 5,000 rupee note is the largest denomination in circulation. From 13 August 2005, the SBP started introducing its fifth generation design of banknotes with additional security features, with the Rs. 20 note being the first issuance. New designs of Rs. 5 (July 2008, later replaced by a coin), 10 (May 2006), Rs. 20 (March 2008, new color scheme), Rs. 50 (July 2008), Rs. 100 (November 2006), Rs. 500 (January 2010), Rs. 1000 (February 2007), and Rs. 5000 (May 2006) were gradually introduced.

The Pakistani rupee was pegged to the pound sterling until 1982, when the government of General Zia-ul-Haq, changed it to a managed float regime. As a result, the rupee devalued by 38.5% between 1982/83, and many of the industries built by his predecessor suffered a huge surge in import costs. After years of appreciation under Zulfikar Ali Bhutto and despite huge increases in foreign aid, the rupee depreciated.

Foreign exchange rate

The Pakistani rupee depreciated against the US dollar until around the start of the 21st century, when Pakistan's large current-account surplus pushed the value of the rupee up versus the dollar. Pakistan's central bank then stabilized by lowering interest rates and buying dollars, in order to preserve the country's export competitiveness.

US$ to PKR average exchange rates

2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025
62.55	78.50	83.80	85.50	89.23	96.73	102.86	101.29	104.23	104.70	109.84	136.09	158.02	160.02	177.45	248.04	282.90	279.35

Foreign exchange reserves

Pakistan maintains foreign reserves with the State Bank of Pakistan. The currency of the reserves was solely the US dollar, incurring speculated losses after the dollar prices fell during 2005, forcing the then Governor SBP Ishrat Hussain to step down. In the same year, the SBP issued an official statement proclaiming diversification of reserves in currencies including Euro and Yen, withholding the ratio of diversification.

Karachi, the economic capital of Pakistan

Following the international credit crisis and spikes in crude oil prices, Pakistan's economy could not withstand the pressure, and on 11 October 2008, the State Bank of Pakistan reported that the country's foreign exchange reserves had gone down by $571.9 million to $7,749.7 million. The foreign exchange reserves had declined by more than $10 billion to a level of $6.59 billion. In June 2013, Pakistan was on the brink of default on its financial commitments. The country's forex reserves were at a historic low, covering only two weeks' worth of imports. In January 2020, Pakistan's foreign exchange reserves stood at US$11.503 billion.

Amounts in billion US dollars

List	Jun 2008	Jun 2009	Jun 2010	Jun 2011	Jun 2012	Jun 2013	Jun 2014	Jun 2015	Jun 2016	Jun 2017	Jun 2018	Jun 2019	Jun 2020	Jun 2021	Jun 2022	Jun 2023	Jun 2024	Jun 2025
Total reserves	11.4	12.4	16.8	18.2	15.3	11.0	14.1	18.7	23.1	21.4	16.4	14.5	18.9	24.4	15.5	9.2	14.0	19.3
SBP reserves	8.6	9.1	13.0	14.8	10.8	6.0	9.1	13.5	18.1	16.1	9.8	7.3	12.1	17.3	9.9	4.5	9.4	14.5
Banks reserves	2.8	3.3	3.8	3.5	4.5	5.0	5.0	5.2	5.0	5.3	6.6	7.2	6.8	7.1	5.6	4.7	4.6	4.8

Structure of economy

See also: Economic liberalisation in Pakistan

Agriculture accounted for about 53% of the GDP in 1947. While per-capita agricultural output has grown since then, it has been outpaced by the growth of the non-agricultural sectors, and the share of agriculture has dropped to roughly one-fifth of Pakistan's economy. In recent years, the country has seen rapid growth in industries, such as apparel, textiles, and cement, and services, such as telecommunications, transportation, advertising, and finance.

Sectoral shares % in GDP (at constant basic prices)

Sectors	FY 2000	FY 2005	FY 2010	FY 2015	FY 2020	FY 2025
Agricultural	31.75	28.15	25.89	24.83	23.53	23.54
Industrial	16.73	19.01	19.04	19.11	18.53	18.07
Services	51.52	52.84	55.07	56.06	57.94	58.39

Major sectors

Agriculture

Main article: Agriculture in Pakistan

See also: Rice production in Pakistan

Yellow and green fields in Punjab

The majority of the population, directly or indirectly, is dependent on this sector, contributing about 23.0% of the gross domestic product (GDP) and accounting for 37.4% of the employed labor force in 2021. It is the largest source of foreign exchange earnings. The most important crops are wheat, sugarcane, cotton, and rice, accounting for more than 75% of the value of total crop output. Pakistan's largest food crop is wheat. In 2017, Pakistan produced 26,674,000 tonnes of wheat, almost equal to all of Africa (27.1 million tonnes) and more than all of South America (25.9 million tonnes), according to the FAOSTAT. In the market year of 2018/19, Pakistan exported a record 4.5 million tonnes of rice.

Pakistan is a net food exporter, except in occasional years when its harvest is adversely affected by droughts. Pakistan exports rice, cotton, fish, fruits (especially Oranges and Mangoes), and vegetables and imports vegetable oil, wheat, pulses, and consumer foods. The economic importance of agriculture has declined since independence when its share of GDP was around 53%.

% growth

List	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025
Agriculture sector	0.81	3.41	0.31	2.71	3.23	3.14	2.42	1.78	0.41	2.22	3.88	0.94	3.91	3.52	4.21	2.24	6.40	0.56
Production of important crops (million tonnes)
Wheat	20.9	24.0	23.3	25.2	23.5	24.2	26.0	25.1	25.6	26.7	25.1	24.3	25.2	27.5	26.2	28.2	31.8	28.4
Rice	5.6	6.9	6.9	4.8	6.2	5.6	6.8	7.0	6.8	6.8	7.5	7.2	7.4	8.4	9.3	7.3	9.9	9.7
Sugarcane	63.9	50.0	49.4	55.3	58.4	63.8	67.5	62.8	65.5	75.5	83.3	67.2	66.4	81.0	88.7	88.0	87.6	84.2
Cotton *	11.7	11.8	12.9	11.5	13.6	13.0	12.8	14.0	9.9	10.7	11.9	9.9	9.1	7.1	8.3	4.9	10.2	7.1
Maize / corn	3.6	3.6	3.3	3.7	4.3	4.2	5.0	4.9	5.3	6.1	5.9	6.8	7.9	8.9	9.5	11.0	9.7	9.0

* Cotton production in million bales.

Pakistan's principal natural resources are arable land and water. About 25% of Pakistan's total land area is under cultivation and is watered by one of the largest irrigation systems in the world. Pakistan irrigates three times more acres than Russia. Pakistan agriculture also benefits from year-round warmth. Zarai Taraqiati Bank Limited is the largest financial institution geared towards the development of the agriculture sector through the provision of financial services and technical expertise.

Fishing

Main article: Fishing industry in Pakistan

Forestry

Main article: Forestry in Pakistan

Livestock

Main article: Animal husbandry in Pakistan

Industry

Main article: Industry of Pakistan

Factory in Pakistan

Pakistan's industrial sector accounts for approximately 19.12% of GDP. In 2021, it recorded a growth of 7.81%, compared to the negative 5.75% in 2020. The government is privatizing large-scale industrial units, and the public sector accounts for a shrinking proportion of industrial output, while growth in overall industrial output (including the private sector) has accelerated. Government policies aim to diversify the country's industrial base and bolster export industries. Large Scale Manufacturing is the fastest-growing sector in the Pakistani economy. Major industries include textiles, fertiliser, cement, oil refineries, dairy products, food processing, beverages, construction materials, clothing, paper products, and shrimp.

In Pakistan, SMEs have a significant contribution to the total GDP of Pakistan. According to SMEDA and Economic survey reports, the share in the annual GDP is 40%, with SMEs generating significant employment opportunities for skilled workers and entrepreneurs. Small and medium-scale firms represent nearly 90% of all enterprises in Pakistan and employ 80% of the non-agricultural labor force. These figures indicate the potential and further growth in this sector.

% growth

List	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025
Industrial sector	8.78	-4.15	3.95	4.87	2.33	1.16	4.34	5.40	6.01	4.61	9.18	0.25	-5.75	8.20	7.01	-3.88	-1.37	4.77
Manufacturing	6.14	-3.94	1.73	2.61	2.01	5.37	5.76	4.12	4.03	4.87	7.08	4.52	-7.80	10.52	10.86	-5.26	3.03	1.34
Mining	3.70	-1.04	2.42	-4.04	5.26	1.77	1.02	3.95	5.64	-0.89	7.26	0.54	-7.17	1.72	-6.66	-3.23	-4.02	-3.38
Construction	13.37	-6.70	7.27	-7.97	2.17	5.40	3.19	8.33	14.37	10.20	19.55	-18.14	-3.08	2.39	1.83	-10.25	-1.14	6.61

Manufacturing

Manufacturing is the largest of Pakistan's industrial sectors, accounting for approximately 12.13% of GDP. The manufacturing sub-sector is further divided into three components: large-scale manufacturing (LSM) with a share of 79.6% in the manufacturing sector, small-scale manufacturing with a share of 13.8% in the manufacturing sector, while slaughtering contributes 6.5% to manufacturing. Major sectors in industries include cement, fertiliser, edible oil, sugar, steel, tobacco, chemicals, machinery, food processing, and medical instruments, primarily surgical. Pakistan is one of the largest manufacturers and exporters of surgical instruments.

Production of selected manufactured goods

Manufactured goods	Unit of quantity	2016	2017	2018	2019	2020	2021	2022	2023	2024
Cotton yarn	Metric tonne (000)	3,406	3,428	3,430	3,431	3,060	3,442	3,459	2,695	2,477
Jute goods		55	60	74	67	65	70	58	63	41
Cooking oil		380	390	391	406	442	460	510	567	642
Sugar		5,115	7,049	6,566	5,260	4,881	5,694	7,921	6,709	6,796
Cement		35,432	37,022	41,148	39,924	39,121	49,797	48,011	41,448	39,566
Paper & board		610	669	731	704	707	730	825	792	787
Caustic soda		225	224	270	247	342	394	405	476	497
Hydrogen chloride		172	177	251	425	361	417	510	525	507
Sulphuric acid		75	56	49	49	40	72	111	71	64
Vegetable ghee		1,241	1,280	1,347	1,392	1,454	1,455	1,393	1,554	1,493
Cotton cloth	Million meters	1,039	1,043	1,044	1,046	935	1,048	1,051	921	871
Cigarettes	Billion	54	34	59	61	46	52	60	43	33
Nitrogenous fertilizers	NT (000)	3,018	3,063	2,758	2,990	3,139	3,324	3,391	3,163	3,483
Phosphatic fertilizers		664	683	619	633	631	748	804	616	756
Cycle tyres & tubes	Numbers (000)	11,490	11,507	11,470	14,491	13,496	10,314	10,876	10,702	10,943
Motor tyres & tubes		34,202	34,345	35,057	36,321	35,678	31,906	30,296	30,515	31,107
Motorcycles		2,071	2,501	2,825	2,460	1,813	2,476	2,190	1,289	1,235
Bicycles		199	200	200	174	141	79	141	146	159
Electric transformers		33	37	47	31	23	29	35	32	22
Refrigerators		1,477	1,834	1,348	1,084	716	1,351	1,389	1,008	818
Air conditioners		388	471	451	518	216	508	540	347	224
Electric fans		2,033	2,523	2,596	2,591	2,124	2,499	2,600	2,182	2,283
Electric meters		1,310	1,923	1,715	1,550	1,039	1,419	2,030	2,038	2,117
Motor spirits/petrol	Million liters	2,216	2,518	2,988	3,085	2,684	3,424	3,392	3,051	3,294
High speed diesel		5,236	5,467	6,283	5,665	4,529	5,612	5,615	4,655	5,340
Furnace oil		3,080	3,215	3,478	3,063	2,370	2,717	2,567	2,191	2,633
Jeeps & cars	Numbers	180,717	193,996	231,738	218,845	106,764	182,389	271,923	131,978	100,221
Tractors	Numbers	34,914	53,975	71,894	49,902	32,608	50,700	58,922	31,752	46,275
Trucks & buses	Numbers	8,331	10,548	13,425	9,684	4,848	5,977	7,934	4,839	3,240

Pakistan's largest corporations are primarily engaged in utilities such as oil, gas, electricity, automobile, cement, food, chemicals, fertilizer, civil aviation, textile, and telecommunication.

Their assets, sales, and profit/loss for the year 2023 are listed below:

Amounts are in billion PKR.

Name	Total assets	Sales	Profit / (loss) after tax
Oil and Gas Development Co. Ltd.	1,424	414	224.6
Sui Northern Gas Pipelines Limited	1,268	1,294	10.4
Pakistan State Oil Co. Ltd.	983	3,391	5.7
K-Electric	1,025	519	(30.9)
Sui Southern Gas Co. Ltd	798	376	(11.4)
Pakistan Petroleum Ltd.	790	286	97.9
Lucky Cement Ltd.	608	385	49.4
The Hub Power Co. Ltd.	406	114	62.0
Attock Refinery Ltd.	193	369	28.0
Fatima Fertilizer Co. Ltd.	234	235	23.0
Engro Fertilizers Ltd.	161	224	26.2
Fauji Fertilizer Co. Ltd.	327	181	19.7
Attock Petroleum Ltd.	108	474	12.5
Indus Motor Co. Ltd.	123	178	9.7
Shell Pakistan Ltd.	106	432	5.8
Fauji Fertilizer Bin Qasim Ltd.	146	193	4.4
National Refinery Ltd.	112	299	(4.5)
Nestle Pakistan Ltd.	98	201	16.5
Cnergyico PK Limited	365	194	(13.6)
Pakistan Telecommunication Co. Ltd.	644	188	(15.5)
Pakistan International Airlines Corporation Ltd.	321	179	(17.5)
Nishat Mills Ltd.	170	142	12.2
Fauji Cement Co. Ltd.	139	90	29.5
Gul Ahmed Textile Mills Ltd.	134	139	4.9
INTERLOOP (Pvt) Ltd.	125	121	21.7
Pakistan Tobacco Co. Ltd.	110	110	29.0
Bestway Cement Ltd.	175	88	11.9
Pakistan Refinery Ltd.	105	262	1.8

Cement industry

In 1947, Pakistan inherited four cement plants with a total capacity of 0.5 million tons. Some expansion occurred in 1956–66 but couldn't keep pace with economic development. The country resorted to cement imports in 1976–77, continuing until 1994–95. The cement sector, comprising 27 plants, contributes over Rs 30 billion to the national exchequer in taxes. By 2013, Pakistan's cement industry grew rapidly, driven by demand from Afghanistan and countries boosting the real estate sector. In April 2020, the government introduced an incentive package for the construction industry, including an amnesty scheme, tax exemptions, and a Rs 36 billion subsidy for Naya Pakistan Housing Scheme. Additionally, banks were directed to increase construction sector loans to 5 percent of their total loan book, and FED reduction on cement from Rs 2/kg to Rs 1.5/kg provided further impetus to the industry.

Cement production capacity & dispatches (million tonnes)

Indicators	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023
Production capacity	37.68	42.28	45.34	42.37	44.64	44.64	44.64	45.62	45.62	46.39	48.66	55.90	63.53	69.14	69.29	83.18
Local dispatches	22.58	20.33	23.57	22.00	23.95	25.06	26.15	28.20	33.00	35.65	41.15	40.34	39.97	48.12	47.64	40.01
Exports	7.72	10.98	10.65	9.43	8.57	8.37	8.14	7.20	5.87	4.66	4.75	6.54	7.85	9.31	5.26	4.57
Total dispatches	30.30	31.31	34.22	31.43	32.52	33.43	34.28	35.40	38.87	40.32	45.89	46.88	47.81	57.43	52.89	44.58

Fertilizer industry

There are nine urea manufacturing plants, one DAP, three NP, four SSP, two CAN, one SOP, and two plants of blended NPKs with a total production capacity of 9,172 thousand tonnes per annum in 2021. Urea is the main fertilizer, holding a 70 percent share in total production. The installed production capacity of 6,307 thousand tonnes per annum is sufficient to meet local demand, subject to the availability of uninterrupted gas and RLNG supply.

Fertilizer offtake by nutrients ('000 tonnes)

Nutrients	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022
Nitrogen	2925	3034	3476	3133	3207	2853	3185	3308	2672	3730	3435	3408	3415	3711	3838
Phosphorus	630	651	860	767	633	747	881	975	1007	1269	1279	1153	1084	1228	1093
Potassium	27	25	24	32	21	21	24	33	20	41	50	53	50	69	71

Defence industry

Main article: Defence industry of Pakistan

HIT-built Al-Khalid tank on display.

The defence industry of Pakistan, under the Ministry of Defence Production, was established in September 1951 to promote and coordinate the array of military production facilities that have emerged since independence. It is actively engaged in numerous joint production projects, such as the Al Khalid 2 tank, advanced trainer aircraft, combat aircraft, artillery systems like MRLS, combat and surveillance drones like GIDS Shahpar-1 and Shahpar-2, battle management and surveillance radars, electronic warfare systems, navy ships, and submarines.

Pakistan manufactures and sells weapons to over 40 countries, including European customers, generating $620 million annually. The country's sophisticated arms imports increased by 119 percent between 2004–2008 and 2009–13, with China providing 54 percent and the USA 27 percent of Pakistan's imports.

Furniture industry

Main article: Furniture industry in Pakistan

Pharmaceutical industry

Main article: Pharmaceutical industry of Pakistan

Textiles industry

Main article: Textile industry in Pakistan

Most of the textile industry is concentrated in Punjab. However, before 1990, the industry was predominantly located in Karachi.

Presently, the textile industry comprises two main segments: a highly organized large-scale sector and a considerably fragmented cottage/small-scale sector. The organized sector mainly includes integrated Textile Mills, housing numerous spinning units and a limited number of shuttle-less loom units. Conversely, the unorganized sector encompasses downstream industries like Weaving, Finishing, Garment, Towels, and Hosiery, all of which possess significant export potential. Within this sector, certain enterprises have expanded to an international scale and exhibit progressive business philosophies.

Sunday textile market on the sidewalks of Karachi, Pakistan

As of June 2021, the Pakistani textile industry comprised 517 textile units, including 40 composite units and 477 spinning units. This landscape also included 28,500 shuttle-less looms and 375,000 conventional looms. The growth of the spinning sector has been fueled by export demands and cotton production, with subsequent growth observed in the weaving and processing sector. Notably, independent air-jet weaving units have emerged, both as standalone entities and in conjunction with spinning or processing units.

A notable trend is the ongoing backward integration of some clothing units, while spinning units are actively developing weaving, finishing, and assembly capabilities to create a comprehensive supply chain. This symbiotic relationship between the textile and clothing sectors is leading to horizontal and vertical integration, often managed by the same entities or through business collaborations.

This sector contributes nearly one-fourth of industrial value-added and provides employment to about 40 percent of the industrial labor force. Excluding seasonal and cyclical fluctuations, textile products have maintained an average share of about 60 percent in national exports.

Automobile industry

Main article: Automotive industry in Pakistan

Cars on Shahrah-e-Faisal in Karachi

The auto sector constituted about 7 percent of LSM in 2021, contributing significantly to the country's industrial output. Given government support and the removal of obstacles, the industrial expansion is expected to yield positive results soon. Many new investors have joined with commercial production, while existing players have already made substantial investments, with more in the pipeline. Among the automakers yet to start production, Proton, MG, and Volkswagen are poised to make a significant impact in the local passenger vehicle market. Meanwhile, KIA, Hyundai, Changan, and Prince DFSK have already commenced productions in Pakistan.

Production & sale of vehicles

Type		2006	2011	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025
Car	P	170,487	133,972	179,944	188,936	217,774	209,255	94,325	151,794	226,433	101,984	79,573	111,402
	S	165,965	127,944	181,145	185,781	216,786	207,630	96,455	151,182	234,180	96,811	81,577	112,203
Truck	P	4,518	2,901	5,666	7,712	9,326	6,035	2,945	3,808	5,659	3,074	2,204	4,366
	S	4,273	2,942	5,550	7,499	9,331	5,828	3,088	3,695	5,802	3,182	2,187	4,444
Bus	P	825	490	1,070	1,118	803	913	532	570	661	701	419	796
	S	927	515	1,017	1,130	762	935	559	652	696	654	454	788
Jeep & pick-up	P	21,624	20,025	36,609	27,795	42,778	31,978	15,633	31,073	44,421	31,333	21,084	36,807
	S	21,471	18,553	36,534	27,338	42,006	33,016	15,507	30,215	45,087	30,067	22,250	35,820
Farm tractor	P	48,887	70,770	34,914	53,975	71,894	49,902	32,608	50,751	58,880	31,726	45,529	28,607
	S	48,802	69,203	33,986	54,992	70,887	50,405	32,727	50,920	58,947	30,942	45,484	29,192
2/3 wheelers	P	520,124	838,665	1,362,096	1,632,965	1,928,757	1,782,605	1,370,417	1,902,415	1,826,467	1,185,532	1,150,090	1,514,718
	S	516,640	835,455	1,358,643	1,630,735	1,931,340	1,781,959	1,370,005	1,903,932	1,821,885	1,186,969	1,150,112	1,518,752

Note: These figures do not include the production/sale of companies which are not members of the Pakistan Automotive Manufacturers Association (PAMA).

After the entry of new models and brands by new entrants and due to the significantly low benchmark interest rate of 7%, consumer financing hit an all-time high in 2021. This trend started when a new Automotive Development Policy (2016–2021) was first approved by the ECC in its meeting held on 18 March 2016.

Such growth in demand for car financing was last seen during President Pervez Musharraf's regime (2001–2008) when banks, having ample liquidity, lent a significant amount for cars without checking borrowers' capabilities to repay the debt. Later, the car financing bubble burst when a large number of people defaulted on paying off the car financing.

Outstanding loans of consumer financing for automobiles (billion PKR)

Jun 2006	Jun 2007	Jun 2010	Jun 2015	Jun 2016	Jun 2017	Jun 2018	Jun 2019	Jun 2020	Jun 2021	Jun 2022	Jun 2023	Jun 2024
97.78	105.44	64.20	85.12	111.96	154.25	193.60	215.46	211.11	308.10	367.85	293.728	230.501

Mining

Main article: Mining in Pakistan

Khewra Salt Mine in the Jhelum District

Pakistan is endowed with significant mineral resources and is emerging as a very promising area for prospecting/exploration for mineral deposits. In the wake of the 18th amendment to the constitution, all the provinces are free to exploit and explore the mineral resources within their jurisdiction.

Mining and quarrying contribute 13.19% to the industrial sector, with its share in GDP being 2.4%.

In the recent past, exploration by government agencies as well as multinational mining companies presents ample evidence of the occurrences of sizeable mineral deposits. Recent discoveries of a thick oxidised zone underlain by sulphide zones in the shield area of the Punjab province, covered by thick alluvial cover, have opened new vistas for metallic minerals exploration. Pakistan has a large base for industrial minerals. The discovery of coal deposits with over 175 billion tonnes of reserves at Thar in the Sindh province has given an impetus to develop it as an alternative source of energy. There is vast potential for precious and dimension stones.

Extraction of principal minerals in the last 10 fiscal years is given in the table below:

Minerals	Unit of quantity	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024
Coal	Metric ton (000)	3,407	3,750	3,954	4,478	5,407	8,428	9,230	9,678	15,070	20,086
Natural gas	MMCFT (000)	1,466	1,482	1,472	1,459	1,437	1,317	1,279	1,308	1,190	1,141
Crude oil	JSB (000)	34,490	31,652	32,269	32,557	32,495	28,091	27,560	28,098	25,360	25,812
Chromite	Metric ton	100,516	69,333	105,238	97,420	138,244	121,435	134,000	195,000	156,000	259,000
Dolomite	Metric ton	223,117	666,755	301,124	488,825	472,474	302,045	388,000	487,000	544,000	502,000
Gypsum	Metric ton (000)	1,417	1,872	2,080	2,476	2,518	2,150	2,527	2,325	1,640	2,136
Limestone	Metric ton (000)	40,470	46,123	52,149	70,819	75,596	65,810	76,632	58,362	58,941	61,387
Rock salt	Metric ton (000)	2,136	3,553	3,534	3,654	3,799	3,369	3,366	2,716	2,907	3,200
Sulphur	Metric ton	19,730	14,869	23,740	22,040	20,715	19,948	19,000	16,000	11,690	7,200
Barytes	Metric ton	24,689	57,024	75,375	145,189	116,480	55,341	52,000	128,000	141,000	145,000
Marble	Metric ton (000)	2,816	4,747	4,906	8,813	7,736	5,797	7,917	6,626	5,714	7,490

Energy

Main article: Energy policy of Pakistan

See also: Renewable energy in Pakistan and Electricity sector in Pakistan

Wind power plant between Karachi and Hyderabad

The main sources of Pakistan's primary energy supplies are gas, oil, coal, liquefied natural gas (LNG), and hydroelectricity, with shares of 29%, 24%, 15%, 10%, and 11% respectively in 2022. Since coal mining began in the Thar desert and LNG imports from Qatar, coal and imported LNG increased their shares manyfold in just five years in the primary energy supplies of the country. The share of gas has decreased from 50% in 2005 to 24% in 2022, and oil, since 2015, from 35% to 27% in 2022, being largely replaced by coal and LNG. As Pakistan intends to generate around 8,800 megawatts of nuclear power by 2030, its share is also increasing gradually.

Primary energy supplies by source

Fiscal year	Unit	Gas	Oil	Coal	Hydro electricity	LNG	Nuclear electricity	LPG	Renewable electricity	Imported electricity	Total
2005	MTOE	27.95	16.33	4.23	6.13	–	0.67	0.25	–	0.03	55.59
	%Share	50.3	29.4	7.6	11.0	–	1.2	0.5	–	0.0	100
2010	MTOE	30.81	19.81	4.62	6.71	–	0.69	0.40	–	0.06	63.09
	%Share	48.8	31.4	7.3	10.6	–	1.1	0.6	–	0.1	100
2015	MTOE	29.98	24.97	4.95	7.75	0.47	1.38	0.46	0.19	0.11	70.26
	%Share	42.7	35.5	7.0	11.0	0.7	2.0	0.7	0.3	0.1	100
2020	MTOE	26.66	18.19	14.71	8.02	8.32	2.58	1.03	0.99	0.12	80.62
	%Share	33.0	26.7	18.2	9.9	10.3	3.2	1.3	1.2	0.2	100
2023	MTOE	23.88	20.11	12.57	8.75	8.05	6.20	1.56	1.39	0.11	82.62
	%Share	28.9	24.3	15.2	10.6	9.7	7.5	1.9	1.7	0.1	100

(CPPA-G) procures electricity from power producers, and the National Transmission and Despatch Company (NTDC) transmits this electricity via its transmission lines to Distribution Companies (DISCOs), which then distribute this electricity via their distribution lines to end consumers. Balancing Pakistan's supply of electricity against the demand has been a longstanding unresolved issue. Since 2018, there has been an improvement in the availability of electricity due to the substantial increase in generation capacity. However, the cost of electricity has risen due to various factors such as circular debt, capacity payments, fuel costs, currency devaluation, low recovery rates, and transmission and distribution losses. Pakistan faces a significant challenge in overhauling its electricity supply network.

NEPRA reports

Indicator	2016	2017	2018	2019	2020	2021	2022	2023	2024
Installed capacity (MW)	25,421	28,712	35,979	38,995	38,719	39,772	43,835	45,738	45,888
Electricity generation (GWh)	114,093	120,622	133,588	137,005	134,242	143,589	154,056	138,539	137,196
Electricity consumption (GWh)	94,354	99,616	110,891	113,142	112,071	121,206	133,665	121,863	118,246
Transmission losses (%)	2.57	2.31	2.43	2.83	2.76	2.78	2.62	2.42	2.52
Distribution losses (%)	18.14	17.93	18.32	17.61	17.82	17.32	16.85	16.45	18.31
(%) Share in electricity generation
Hydel	30.29	26.59	21.01	24.16	28.83	27.02	23.07	26.17	29.08
Thermal	64.57	65.34	68.87	65.25	60.21	61.76	60.54	51.55	49.01
Nuclear	3.70	5.20	6.78	6.67	7.37	7.72	11.87	17.36	16.88
Renewable energy	1.04	2.45	2.92	3.57	3.21	3.15	4.18	4.56	4.75
Import			0.42	0.36	0.38	0.35	0.33	0.35	0.28

The total demand for petroleum products remained at 23.1 million tonnes during FY2022. The transport and power sectors are major petroleum consumers, covering approximately 90 percent of the total demand.

Sectoral consumption of petroleum products (FY 2022)

Sector		Domestic	Industry	Agriculture	Transport	Power	Government	Overseas	Total
Quantity	(000) MT	29.522	1,332.899	11.822	17,409.035	3,683.322	373.489	250.121	23,090.210

Pakistan is an importer of petroleum products and crude oil. Imports of petroleum products during FY2022 amounted to around 12.9 million tonnes, valued at more than US$11.1 billion. The major imported products are motor spirit/gasoline, high-speed diesel, and furnace oil, with import quantities of 6,502 thousand tonnes, 3,950 thousand tonnes, and 2,258 thousand tonnes, respectively.

Import of petroleum products (FY 2022)

Product		MS	HOBC	HSD	FO	JP-1	Total
Quantity	(000) MT	6,502.07	125.62	3,949.97	2,258.20	53.87	12,889.730
Value	Million US$	6,070.38	115.94	3,462.71	1,414.40	47.42	11,110.852

The total production of refineries in Pakistan for fiscal year 2020–21 reached 10.66 million tons. Among these refineries, PARCO holds the largest share, accounting for 41%, followed by ARL, BPPL, NRL, and PRL with shares of 17%, 16%, 14%, and 12% respectively. OGRA, founded in March 2002, serves as the regulatory body with the primary goals of promoting competition and enhancing private investment and ownership within the petroleum sector by implementing effective and efficient regulations. Oil Marketing Companies (OMCs) have established their infrastructure, including storage facilities and retail outlets, to market Petroleum, Oil, and Lubricant (POL) products. Motor Spirit (MS) and High-Speed Diesel (HSD) together make up nearly 80% of OMCs' sales. By the conclusion of fiscal year 2021, OMCs had developed a storage capacity of 0.58 million tons for MS and 0.88 million tons for HSD, distributed across various depots throughout the country. Oil Marketing Companies (OMCs) operate a total of 9,978 retail outlets nationwide. Among these, Pakistan State Oil (PSO) holds the highest number of retail outlets, boasting 3,158 outlets, which accounts for approximately 31.65 percent of the total.

Indigenous natural gas supplies accounted for approximately 30 percent of Pakistan's total primary energy supply mix in FY2022. Pakistan maintains an extensive gas network comprising over 13,775 kilometers of transmission pipelines, 157,395 kilometers of main pipelines, and 41,352 kilometers of service pipelines. This network serves the needs of more than 10.7 million consumers throughout the country. During FY 2021–22, the natural gas supply in Pakistan reached 3,982 MMCFD. The country relies on several major gas fields, including Sui, Uch, Qadirpur, Sawan, Zamzama, Badin, Bhit, Kandhkot, Mari, and Manzalai, to meet its domestic demand. Additionally, Pakistan has been importing liquefied natural gas (LNG) since 2015, with regasified liquefied natural gas (RLNG) playing a significant role in alleviating natural gas shortages. In the year 2021–22, approximately 24 percent of the country's gas supplies were sourced from imported RLNG.

In FY 2020–21, the primary consumer of natural gas was the power sector, which accounted for more than 30 percent of the total consumption, equivalent to 1,208 MMCFD. Following the power sector, the domestic sector consumed 21 percent, or 850 MMCFD, while the fertilizer sector consumed 20 percent, totaling 834 MMCFD.

Services

Pakistan's service sector contributes approximately 61.7% to the GDP. Within this sector, transport, storage, communications, finance, and insurance comprise 24%, while wholesale and retail trade constitute about 30%. Pakistan is actively promoting the growth of the information industry and other modern service industries by offering incentives such as long-term tax holidays.

% growth

List	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025
Service sector	4.72	1.84	2.63	2.86	3.48	5.13	3.82	4.20	5.03	5.62	5.95	5.00	-1.21	5.91	6.69	0.04	2.19	2.91

Education

Main article: Education in Pakistan

Healthcare

Main article: Healthcare in Pakistan

Telecommunications

Main article: Telecommunications in Pakistan

See also: Mobile phone industry in Pakistan and Internet in Pakistan

PTCL's One Stop Shop in Islamabad

After the deregulation of the telecommunications industry, the sector has experienced exponential growth. Pakistan Telecommunication Company Ltd (PTCL) has emerged as a successful Forbes 2000 conglomerate with over US$1 billion in sales in 2005. The mobile telephone market has expanded many-fold since 2003, reaching a subscriber base of 140 million users in July 2017, one of the highest mobile teledensities in the world. Pakistan won the prestigious Government Leadership award of GSM Association in 2006.

In Pakistan, the following are the top mobile phone operators:

1. Jazz Pakistan (parent: VEON, Netherlands)
2. Ufone (parent: PTCL (Etisalat), Pakistan/UAE)
3. Telenor (parent: Telenor, Norway)
4. Zong (parent: China Mobile, China)

By March 2009, Pakistan had 91 million mobile subscribers – 25 million more subscribers than reported in the same period in 2008. In addition to the 3.1 million fixed lines, as many as 2.4 million are using Wireless Local Loop connections. Sony Ericsson, Nokia and Motorola along with Samsung and LG remain the most popular brands among customers.

After liberalisation, between 2003 to 2007, the Pakistani telecom sector attracted more than $9 billion in foreign investments. During 2007–08, the Pakistani communication sector alone received $1.62 billion in Foreign Direct Investment (FDI) – about 30% of the country's total foreign direct investment.

According to the PC World, a total of 6.37 billion text messages were sent through Acision messaging systems across Asia Pacific over the 2008/2009 Christmas and New Year period. Pakistan was amongst the top five rankers with one of the highest SMS traffic with 763 million messages.

On 14 August 2010, Pakistan became the first country in the world to experience EVDO's RevB 3G technology that offers maximum speeds of 9.3 Mbit/s.

3G and 4G were simultaneously launched in Pakistan on 23 April 2014 through a SMRA auction. Three out of five companies got a 3G licence i.e. Ufone, Mobilink and Telenor while China Mobile's Zong got 3G as well as a 4G licence. Whereas the fifth company, Warid Pakistan did not participate in the auction procedure, but they launched 4G LTE services on their existing 2G 1800 MHz spectrum due to Technology-neutral terms and became the world's first Telecom Company to transform directly from 2G to 4G. With that, Pakistan joined the 3G and 4G world. In December 2017, 3G and 4G subscribers in Pakistan reached 46 million.

After the successful implementation of the Device Identification Registration and Blocking System (DIRBS) in 2019 along with a comprehensive mobile manufacturing policy, it created a favourable environment for mobile device manufacturing in Pakistan. For the first time in the history of Pakistan, local mobile phone manufacturing exceeded the number of mobile phones that were imported in 2021. Mobile device manufacturing licences have been issued to 26 companies, including Samsung, Redmi, Realme, Nokia, Oppo, TECNO, Infinix, Itel, Vgotel, and Q-Mobile.

PTA reports

Indicators	2003	2004	2005	2006	2007	2017	2018	2019	2020	2021	2022	2023	2024
Teledensity	4.31%	6.25%	11.9%	26.24%	44.06%	72.4%	74.1%	75.1%	76.3%	81.7%	84.6%	81.4%	80.5%
Telecom subscribers (millions)	2.4	5.0	12.7	34.5	62.3	139.8	151.5	165.0	171.1	186.8	197.2	193.5	195.1
Broadband subscribers (millions)				0.03	0.05	44.8	58.7	71.5	83.8	102.7	118.8	127.6	138.3
Broadband penetration				0.0%	0.0%	22.7%	28.1%	32.6%	37.4%	44.9%	51.0%	53.6%	57.0%
Cellular mobile data usage (petabytes)						690	1,262	2,493	4,510	6,853	8,970	10,850	13,021
Telecom revenues (billion PKR)		118	144	195	236	528	540	604	595	641	717	817	955
Telecom contribution to exchequer (billion PKR)	30.0	38	67	77	100	161	163	111	286	222	329	341	335
Total telecom investment (million US $)			1,473	1,731	4,109	1,133	1,132	882	1,140	1,214	1,657	770	765
Mobile (CBU) imports (million units)						18.11	12.07	16.28	24.51	10.26	1.53	1.58	1.71
Local assembly / manufacturing (million units)						1.72	5.2	11.74	13.05	24.66	21.94	21.28	31.38

Information technology

Main article: Information technology in Pakistan

Transportation

Main article: Transportation in Pakistan

Air linkage

See also: List of airports in Pakistan and List of airlines of Pakistan

Jinnah International Airport in Karachi

The year 1955 marked the inauguration of the Pakistan airline's first scheduled international service – to London, via Cairo and Rome. In 1959, the Government of Pakistan appointed Air Commodore Nur Khan as the managing director of PIA. With his visionary leadership, PIA 'took off' and within a short span of 6 years, gained the stature and status of one of the world's frontline carriers. In aviation circles, this period has often been referred to as the "golden years of PIA". On 29 April 1964, with a Boeing 720B, PIA earned the distinction of becoming the first airline from a non-communist country to fly into the People's Republic of China. Private sector airlines in Pakistan include Airblue, which serves the main cities within Pakistan in addition to destinations in the Persian Gulf and Manchester in the United Kingdom.

PIA annual reports

Indicators	2003	2008	2013	2018	2019	2020	2021	2022	2023	2024
Route kilometers	290,129	311,131	411,936	332,303	389,725	705,820	374,054	341,821	301,832	593,063
Passengers carried (000)	4,556	5,617	4,449	5,203	5,290	2,541	2,657	4,281	4,496	3,904
Operating revenue (billion PKR)	47.952	88.863	95.771	103.490	147.500	94.989	86.185	172.038	237.883	204.164
Operating expenses (billion PKR)	42.574	120.499	123.151	150.524	153.631	95.670	101.212	183.354	233.988	194.807
Profit+/-loss after tax (billion PKR)	+1.298	-36.138	-44.322	-67.328	-52.602	-34.643	-50.101	-88.008	-104.501	+26.204

Railway linkage

See also: List of railway lines in Pakistan

A Pakistan Railway train

Pakistan Railways (PR) is a major mode of transport in the public sector, contributing to the country's economic growth and providing national integration. 13 May 1861 was a historical day when the first railway line was opened for public between Karachi City and Kotri, a distance of 169 km. In 1885, the Sindh, Punjab and Delhi Railways were purchased by the Secretary of State for India. On 1 January 1886 this line and other State Railways were integrated and North Western State Railway was formed; this was later renamed as North Western Railways (NWR). At the time of Independence, the NWR was bifurcated with 1,847 route miles lying in India and 5,048 route miles in Pakistan. In 2022, Pakistan Railways comprised a total of 467 locomotives (462 diesel engines and 05 steam engines) for the 7,479 km route length. Pakistan Railways employed 60,643 people in 2022.

Pakistan Railway year books

Indicators	2016	2017	2018	2019	2020	2021	2022	2023	2024
Route kilometers	7,791	7,791	7,791	7,791	7,791	7,791	7,479	7,791	7,791
Track kilometers	11,881	11,881	11,881	11,881	11,881	11,881	11,492	11,881	11,881
Passengers carried (000)	52,192	52,388	54,907	60,387	44,304	28,424	35,681	35,404	42,103
Goods carried (000 tonnes)	5,001	5,630	8,355	8,376	7,412	8,213	8,098	5,748	7,854
Operating revenue (billion PKR)	36.58	40.06	49.57	54.51	47.58	48.65	60.09	63.29	88.73
Operating expenses (billion PKR)	41.86	50.07	52.07	53.77	59.29	56.33	67.56	72.12	88.31
Net loss (billion PKR)	26.53	40.79	37.12	33.49	50.27	47.71	48.49	47.77	53.32

Road linkage

See also: List of roads in Pakistan

Karakoram Highway

The National Highway Authority (NHA) was established in 1991 through an Act of Parliament for the planning, development, operation, repair, and maintenance of National Highways and Strategic Roads specially entrusted to NHA by the Federal Government or by a Provincial Government or other authority concerned. NHA is the custodian of 39 national highways, motorways, expressways, and strategic routes, with a total length of 12,131 km, constituting 4.6% of the total national roads network, which is 263,775 km. However, it carries 80% of commercial traffic, and the N-5 National Highway, which is the lifeline of Pakistan, carries 65% of this load in the country.

Maritime linkage

See also: List of ports in Pakistan

Port of Karachi

Pakistan National Shipping Corporation (PNSC) is a national flag carrier. It was formed through the merger of the National Shipping Corporation and Pakistan Shipping Corporation in 1979. PNSC has had worldwide operations in the dry bulk segment of the shipping market since its inception, and has been involved in the transportation of liquid cargo since 1998, both locally and internationally. The corporation's head office is located in Karachi. Currently, the PNSC fleet comprises eleven vessels of various types and sizes (five bulk carriers, four Aframax tankers, and two LR-1 Clean Product tankers) with a total deadweight capacity (cargo carrying capacity) of 831,711 metric tons, the highest ever carrying capacity since the inception of PNSC.

Finance

Main articles: Banking in Pakistan and Insurance in Pakistan

See also: List of banks in Pakistan and Insurance in Pakistan

Pakistan has a large and diverse banking system. In 1974, a nationalization programme led to the creation of six government-owned banks. A privatization programme in the 1990s led to the entry of foreign-owned and local banks into the industry. As of 2010, there were five publicly owned commercial banks in Pakistan, as well as 25 domestic private banks, six multinational banks, and four specialised banks.

A part of Downtown Karachi, Showing the MCB Tower and Habib Bank Plaza. The headquarters of many banks in Pakistan can be found here.

Since 2000, Pakistani banks have begun aggressive marketing of consumer finance to the emerging middle class, allowing for a consumption boom (more than a seven-month waiting list for certain car models) as well as a construction bonanza. Pakistan's banking sector remained remarkably strong and resilient during the 2008 financial crisis, a feature which has served to attract a substantial amount of FDI in the sector. Stress tests conducted in June 2008 data indicate that the large banks are relatively robust, with the medium and small-sized banks positioning themselves in niche markets.

The Pakistan Bureau of Statistics provisionally valued this sector at Rs.807,807 million in 2012, thus registering over 510% growth since 2000.

An article published in the Journal of the Asia Pacific Economy by Mete Feridun of the University of Greenwich in London with his Pakistani colleague Abdul Jalil presents strong econometric evidence that financial development fosters economic growth in Pakistan.

Financial statements of major banks 2023 (billion PKR)

Bank	Total assets	Revenue	Profit after tax
State Bank of Pakistan	19,687	1,218	1,143.0
Habib Bank Ltd	5,202	277	56.9
Meezan Bank	3,012	249	84.5
National Bank of Pakistan	6,653	209	51.8
MCB BANK LTD.	2,427	181	59.6
United Bank Limited	5,575	166	53.2
Bank Alfalah	3,346	154	36.5
Bank AL Habib	2,741	147	35.3
Allied Bank Limited	2,329	138	40.7
Standard Chartered Bank Ltd.	1,002	107	42.6
HabibMetro	1,556	87	24.4

In recent years, banking through digital channels has been gaining popularity in the country. These channels offer alternatives resulting in faster delivery of financial services to a wide range of customers. Significant progress has been observed in the usage of internet banking and mobile banking channels during the last few years. In the last five years, internet banking transactions saw compound annualised growth of 31%, whereas mobile banking transactions grew by 86%.

Payment system infrastructure

	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024
Commercial banks + MFBs	44	44	44	44	45
Bank branches	16,067	16,308	17,031	17,693	18,450
Total number of ATMs	15,612	16,355	17,133	17,808	18,957
Internet banking users (000)	3,983	5,239	8,370	9,637	11,996
Mobile phone banking users (000)	8,452	10,873	12,339	16,061	18,678
POS machines	49,067	71,907	104,865	115,288	125,593
Credit cards (million)	1.66	1.72	1.80	2.01	2.04
Debit cards (million)	26.7	29.8	34.6	39.0	48.3

Payment system statistics

		FY 2020	FY 2021	FY 2022	FY 2023	FY 2024
PRISM system*	Transactions (millions)	2.6	4.2	4.4	4.9	5.8
	Amount (trillion PKR)	394.3	444.6	681.6	640.4	1,043.1
Paper based	Transactions (millions)	598.4	582.3	599.1	574.2	571.2
	Amount (trillion PKR)	185.6	218.9	295.7	342.7	447.7
Mobile banking	Transactions (millions)	82.8	193.4	387.5	660.6	1,122.8
	Amount (trillion PKR)	1.8	4.9	11.8	23.8	46.3
E-commerce	Transactions (millions)	10.2	21.9	45.5	31.8	39.9
	Amount (billion PKR)	34.9	60.6	106.0	142.0	194.3

* Real-time gross settlement (RTGS) mechanism in Pakistan is named the Pakistan Real-time Interbank Settlement Mechanism (PRISM).

Housing

Main article: Housing in Pakistan

See also: Real estate in Pakistan

House on mountains in Murree

The property sector has expanded 23-fold since 2001, particularly in metropolises like Lahore. Nevertheless, the Karachi Chamber of Commerce and Industry estimated in late 2006 that the overall production of housing units in Pakistan has to be increased to 0.5 million units annually to address 6.1 million backlog of housing in Pakistan for meeting the housing shortfall in next 20 years. The report noted that the present housing stock is also rapidly aging and an estimate suggests that more than 50% of stock is over 50 years old. It is also estimated that 50% of the urban population now lives in slums and squatter settlements. The report said that meeting the backlog in housing, besides replacement of out-lived housing units, is beyond the financial resources of the government. This necessitates putting in place a framework to facilitate financing in the formal private sector and mobilise non-government resources for a market-based housing finance system. To promote affordable housing and home ownership among low to middle-income group, who currently do not own a house, SBP in 2020 introduced the Government's Mark-Up Subsidy Scheme, through which subsidized financing is provided to individuals for construction or purchase of a new house. Since then, a huge demand for house financing has been witnessed by the commercial banks.

Outstanding loans of consumer financing for house building (billion PKR)

Jun 2006	Jun 2010	Jun 2015	Jun 2016	Jun 2017	Jun 2018	Jun 2019	Jun 2020	Jun 2021	Jun 2022	Jun 2023	Jun 2024
43.205	54.500	40.207	48.153	60.688	82.939	92.561	79.803	103.631	200.765	212.315	203.580

Tourism

Main article: Tourism in Pakistan

Tourism in Pakistan has been hailed as the tourism industry's "next big thing". Pakistan, with its diverse cultures, people, and landscapes, has attracted 90 million tourists to the country, almost double that of a decade ago. Currently, Pakistan ranks 130th in the world by tourist income. Due to the threat of terrorism, the number of foreign tourists has gradually declined, and the shock of the 2013 Nanga Parbat tourist shooting has severely adversely affected the tourism industry. As of 2016, tourism has begun to recover in Pakistan, albeit gradually, with a current global rank of 130.

Science and technology

Main article: Science and technology in Pakistan

Labour

Main article: Labour in Pakistan

Foreign trade, remittances, aid, and investment

Investment

Foreign investment significantly declined by 2010, dropping by 54.6% due to Pakistan's political instability and weak law and order, according to the Bank of Pakistan.

Business regulations have been overhauled along liberal lines, especially since 1999. Most barriers to the flow of capital and international direct investment have been removed. Foreign investors do not face any restrictions on the inflow of capital, and investment of up to 100% of equity participation is allowed in most sectors. Unlimited remittance of profits, dividends, service fees or capital is now the rule. However, doing business has been becoming increasingly difficult over the past decade due to political instability, rising domestic insurgency and insecurity and vehement corruption. This can be confirmed by the World Bank's Ease of Doing Business Index report degrading its ratings for Pakistan each year since September 2009.

The World Bank (WB) and International Finance Corporation's flagship report Ease of Doing Business Index 2020 ranked Pakistan 108 among 190 countries around the globe, indicating a continuous improvement and taking a jump from 136 last year. The top five countries were New Zealand, Singapore, Denmark, Hong Kong and South Korea.

With improvement in ease of doing business ranking and giving an investment friendly road map from government, many new auto sector giants like France's Renault, South Korean's Hyundai and Kia, Chinese JW Forland and German auto giant Volkswagen are considering entry into Pakistan auto market through joint ventures with local manufacturers like Dewan Farooque Motors, Khalid Mushtaq Motors and United Motors. As of March 2022, only the Hyundai Nishat JV materialised.

US oil and gas giant Exxon Mobil returned to Pakistan after nearly three decades gap and has acquired 25% shares in offshore drilling in May 2018, with initial survey showing a potential of huge hydrocarbon reserves discovery offshore.

To boost Pakistan's unstable foreign-exchange reserves, Qatar announced to invest $3 billion in the form of deposits and direct investments in the country. By the end of June 2019, Qatar sent the first $500 million to Pakistan.

Data is from SBP.

Amounts are in million US$.

List	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024
Foreign direct investment	5,410	3,720	2,151	1,635	821	1,457	1,699	1,034	2,393	2,407	2,780	1,362	2,598	1,821	1,936	1,627	1,902

Foreign acquisitions and mergers

With the rapid growth in Pakistan's economy, foreign investors are taking a keen interest in the corporate sector of Pakistan. In recent years, majority stakes in many corporations have been acquired by multinational groups.

• PICIC by Singapore-based Temasek Holdings for $339 million
• Union Bank by Standard Chartered Bank for $487 million
• Prime Commercial Bank by ABN Amro for $228 million
• PakTel by China Mobile for $460 million
• PTCL by Etisalat for $1.8 billion
• Additional 57.6% shares of Lakson Tobacco Company acquired by Philip Morris International for $382 million
• In 2016, Arçelik acquired Dawlance for $243 million.
• In 2016, FrieslandCampina acquired 51% stake in Engro Foods for $446.81 million.
• In 2016, The Abraaj Group sold its 66.4% stake in K-Electric to Shanghai Electric for $1.77 billion.

The foreign exchange receipts from these sales are also helping cover the current account deficit.

Foreign trade

Main article: Foreign trade of Pakistan

See also: List of tariffs in Pakistan and Category:Foreign trade of Pakistan

Gwader port in Balochistan

Pakistan witnessed the highest export of US$25.4 billion in the FY 2011. However, in subsequent years exports have declined considerably. This decline started from the financial year 2015 when an international commodity slump set in. This was compounded by structural supply-side constraints including energy shortages, high input costs, and an overvalued exchange rate. From the financial year 2014 to 2016, exports declined by 12.4 percent. The exports growth trend over this period was similar to the world trade growth patterns. Pakistan's external sector continued facing stress during 2017. Still, Pakistan's merchandise trade exports grew by 0.1 percent during the fiscal year 2017. The imports continued to grow at a much faster rate and grew by a large percentage of 18.0 during the FY 2017 as compared to the previous year.

Note: This is the trade data (export and import) as released by the SBP. This may differ from the data compiled by Pakistan Bureau of Statistics.

Amounts in billion US dollars

List	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025
Total exports	24.01	23.21	24.89	31.11	29.73	31.53	30.42	29.96	27.43	27.92	30.62	30.22	27.97	31.58	39.60	35.47	38.67	40.69
Goods	20.45	19.13	19.68	25.37	24.72	24.80	25.08	24.09	21.97	22.00	24.77	24.26	22.54	25.64	32.49	27.88	30.98	32.30
Services	3.56	4.09	5.21	5.75	5.01	6.72	5.35	5.87	5.46	5.92	5.85	5.97	5.44	5.95	7.10	7.60	7.69	8.39
Total imports	45.44	39.22	38.12	43.57	48.69	48.45	49.66	50.21	50.12	58.58	67.95	62.81	52.40	62.73	84.49	61.33	63.96	70.09
Goods	35.28	31.67	31.13	35.80	40.37	40.16	41.67	41.36	41.12	48.00	55.67	51.87	43.65	54.27	71.54	52.70	53.16	59.08
Services	10.16	7.56	6.99	7.77	8.32	8.29	8.00	8.85	9.00	10.58	12.28	10.94	8.75	8.46	12.94	8.64	10.80	11.01
Trade deficit	21.43	16.01	13.23	12.46	18.96	16.92	19.24	20.24	22.69	30.66	37.33	32.58	24.43	31.15	44.89	25.86	25.29	29.40

Pakistan's imports are showing a rising trend at a relatively faster rate due to increased economic activity as part of the China Pakistan Economic Corridor (CPEC), particularly in the energy sector. The construction projects under CPEC require heavy machinery that has to be imported. It is also observed that the economy is currently being led both by investments as well as consumption, resulting in relatively higher levels of imports. During FY 2018, Pakistan's exports picked up and reached US$24.8 billion, showing a growth of 12.6 percent over the previous year, FY 2017. Imports, on the other hand, also increased by 16.2 percent, reaching the highest figure of US$56.6 billion. As a result, the trade deficit widened to US$31.8 billion, which was the highest in the last ten years. Pakistan's exports of goods recorded their highest level of $25.6 billion during the fiscal year 2021, higher than the $25.3 billion recorded in 2011.

Exports

Pakistan's major export commodities since fiscal year 2014 are listed in the table below.

Amounts are in million US$.

Commodities	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024
Knitwear	2,264	2,309	2,335	2,615	2,854	2,688	3,372	4,516	4,244	4,018
Ready-made garments	2,044	2,156	2,279	2,477	2,568	2,595	2,820	3,698	3,496	3,471
Bed wear	2,207	2,126	2,157	2,346	2,347	2,230	2,691	3,255	2,804	2,790
Rice	2,038	1,853	1,575	1,933	2,163	2,274	2,211	2,760	2,109	3,684
Cotton cloth	2,487	2,332	2,123	2,176	2,174	1,942	1,884	2,338	2,155	1,898
Chemical and pharmaceutical	1,250	1,052	1,113	1,390	1,227	1,074	1,147	1,482	1,429	1,420
Cotton yarn	1,818	1,266	1,140	1,249	1,202	1,081	921	1,200	870	1,052
Towels	716	721	679	750	713	680	882	1,080	931	954
Leather manufactures	547	488	487	615	503	480	560	649	628	606
Sports goods	585	539	552	551	519	458	471	507	460	439
Surgical goods & medical instruments	401	424	396	442	438	411	480	475	454	456

Imports

Pakistan's major import commodities since fiscal year 2014 are listed in the table below.

Amounts are in million US$.

Commodities	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022
Petroleum products	9,020	7,774	5,098	6,380	6,768	6,039	4,190	4,641	10,296
Petroleum crude	5,755	4,393	2,570	2,765	4,310	4,915	2,606	3,190	4,602
Liquefied natural gas (LNG)	0	135	579	1,271	2,036	2,872	2,375	1,776	3,681
Plastic material	1,680	1,772	1,791	1,875	2,312	2,273	1,941	2,460	3,251
Palm oil	1,922	1,681	1,600	1,775	1,908	1,662	1,752	2,443	3,151
Road vehicles	861	1,025	1,264	1,774	2,182	1,934	1,276	2,143	3,010
Iron and steel	1,540	1,813	2,094	1980	2,523	2,008	1,491	2,197	2,854
Raw cotton	532	449	1,127	909	1,198	1,181	1,342	1,894	2,283
Telecom	1,217	1,225	1,201	1,023	1,397	1,172	1,637	2,513	2,252
Electrical machinery & apparatus	722	935	1,651	1,317	1,801	1,287	1,135	1,452	1,817
Textile machinery	658	492	529	652	615	654	588	855	1,212
Power generating machinery	675	898	1,356	1,337	1,577	732	734	930	795

External imbalances

Main article: National debt of Pakistan

See also: Pakistan and the International Monetary Fund

During FY 2017, the increase in imports of capital equipment and fuel significantly put pressure on the external account. A reversal in global oil prices led to an increase in POL imports, accompanied by falling exports; as a result, the merchandise trade deficit grew by 39.4 percent to US$26.885 billion in FY 2017. While remittances and Coalition Support Fund inflows both declined slightly over the same period last year, however, the impact was offset by an improvement in the income account, mainly due to lower profit repatriations by oil and gas firms.

The current account deficit increased to US$19.2 billion in FY 2018.

However, the impact of high current deficit on foreign exchange reserves was not severe, as financial inflows were available to the country to partially offset the gap; these inflows helped ensure stability in the exchange rate. Net FDI grew by 12.4 percent and reached US$1.6 billion in the nine-month period, whereas net FPI saw an inflow of US$631 million, against an outflow of US$393 million last year. Encouragingly for the country, the period saw the completion of multiple merger and acquisition deals between local and foreign companies. Moreover, multiple foreign automakers announced their intention to enter the Pakistani market, and some also entered into joint ventures with local conglomerates. This indicates that Pakistan is clearly on foreign investors' radar, and provides a positive outlook for FDI inflows going forward. government's successful issuance of a US$1.0 billion Sukuk in the international capital market, at an extremely low rate of 5.5 percent.

Pakistan continued to enjoy support from international financial institutions (IFIs) like the World Bank and Asian Development Bank, and from bilateral partners like China, in the post-EFF period: net official loan inflows of US$1.1 billion were recorded during the period. As a result, the country's FX reserve amounted to US$20.8 billion by 4 May 2017 sufficient to finance around four months of import payments.

Amounts in billion US dollars

List	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025
Credit	37.25	35.36	38.14	47.70	48.24	50.20	51.15	52.90	51.24	52.22	55.15	55.79	54.25	65.12	73.20	64.79	72.25	82.71
Debit	51.12	44.62	42.08	47.49	52.90	52.69	54.28	55.71	56.20	64.49	74.34	69.23	58.70	67.94	90.68	68.06	74.32	80.60
Net	−13.87	−9.26	−3.95	+0.21	−4.66	−2.50	−3.13	−2.82	−4.96	−12.27	−19.20	−13.43	−4.45	−2.82	−17.48	−3.28	-2.07	+2.11
As % of GDP
Net	-8.9	-5.7	-2.3	+0.1	-2.1	-1.1	-1.3	-1.0	-1.7	-4.0	-6.1	-4.8	-1.7	-0.6	-4.7	-0.9	-0.6

Economic aid

Main article: Foreign aid to Pakistan

Pakistan receives economic aid from several sources as loans and grants. The International Monetary Fund (IMF), World Bank (WB), Asian Development Bank (ADB), etc. provide long-term loans to Pakistan. Pakistan also receives bilateral aid from developed and oil-rich countries. Foreign aid has been one of the main sources of money for the Pakistani economy. Collection of foreign aid has been one of the priorities of almost every Pakistani Government with the Prime Minister himself leading delegations on a regular basis to collect foreign aid.

The Asian Development Bank will provide close to $6 billion development assistance to Pakistan during 2006–9. The World Bank unveiled a lending programme of up to $6.5 billion for Pakistan under a new four-year, 2006–2009, aid strategy showing a significant increase in funding aimed largely at beefing up the country's infrastructure. Japan will provide $500 million annual economic aid to Pakistan. In November 2008, the International Monetary Fund (IMF) has approved a loan of 7.6 billion to Pakistan, to help stabilise and rebuild the country's economy. Between the 2008 and 2010 fiscal years, the IMF extended loans to Pakistan totalling 5.2 billion dollars. The government decided in 2011 to cut off ties with the IMF. However, the government newly elected in 2013 re-established these ties, and a negotiated a three-year $6.6 billion package which would allow it to deal with ongoing debt issues. In May 2019, Pakistan finalised a US$6 billion foreign aid with IMF. This is Pakistan's 22nd such bailout from the IMF.

The China–Pakistan Economic Corridor is being developed with a contribution of mainly concessionary loans from China under the Belt and Road Initiative. Much like BRI, the value of CPEC investments transcends any fiat currency and is only estimated vaguely as it spans over decades of past and future industrial development and global economic influence.

Remittances

The remittances of Pakistanis living abroad have played an important role in Pakistan's economy and foreign exchange reserves. Pakistanis settled in Western Europe and North America are significant sources of remittances to Pakistan. Since 1973, Pakistani workers in the oil-rich Arab states have been sources of billions of dollars of remittances.

The 9 million-strong Pakistani diaspora contributed US$19.3 billion to the economy in FY2017. The major source countries of remittances to Pakistan include UAE, US, Saudi Arabia, GCC countries (including Bahrain, Kuwait, Qatar, and Oman), Australia, Canada, Japan, Norway, Switzerland, UK, and EU countries.

Remittances sent home by overseas Pakistani workers saw a negative growth of 3.0% in the fiscal year 2017 compared to the previous year when remittances reached an all-time high of 19.9 billion US dollars. This decline in remittances is mainly due to the adverse economic conditions in Arabian and Gulf countries after the fall in oil prices in 2016. However, recent development activities in the Qatar FIFA World Cup, Dubai Expo, Saudi Arabia's implementation of its Vision 2030, and particularly the recent visit of the PM to Kuwait should all be helpful in opening new avenues for employment in these countries. Going forward, one can expect improvements in the coming years. The SBP's data showed that remittances amounted to $29.4 billion for the year 2021. The government and SBP took measures to incentivise the use of formal channels of sending money home. The orderly foreign exchange market conditions also contributed to the rise in remittances. Remittances helped improve the country's external sector position despite the challenging global economic conditions due to the coronavirus pandemic.

Data is taken from SBP and Ministry of Finance.

Amounts are in billion US$.

List	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025
Workers' remittances	6.4	7.8	8.9	11.2	13.1	13.9	15.8	18.7	19.9	19.4	19.9	21.7	23.1	29.5	31.3	27.3	30.3	38.3

Remittances sent home by overseas Pakistanis in the fiscal year 2020/21 are as follows:

Country	(billion US$)
Saudi Arabia	7.667
UAE	6.114
UK	4.067
Template:Country data Gulf Cooperation Council	3.310
USA	2.754
European Union	2.709
Australia	0.594
Canada	0.586
Malaysia	0.204
Norway	0.111
Japan	0.085
Switzerland	0.041
Other countries	1.130

Economic issues

2021-2024 economic crisis

Main article: Pakistani economic crisis (2021–2024)

Pakistan bonds Inverted yield curve in 2019–2020 and 2022   20 year   10 year   5 year   1 year

Pakistan inflation

Taxation Issues

In fiscal year 2023, tax exemptions and concessions granted to influential sectors such as real estate, manufacturing and energy, cost the state 4.61 percent of GDP.

The Finance Act 2025

The Finance Act 2025 drew significant controversy due to its stringent taxation measures and expanded enforcement powers granted to the Federal Board of Revenue (FBR). Key provisions, including Sections 37A and 37B, allowed for the arrest of individuals without prior notice, raising concerns over potential misuse and arbitrary enforcement. Additionally, measures such as the disallowance of business expenditures linked to cash transactions, penalties for purchases from non-National Tax Number (NTN) holders, mandatory digital invoicing, and an increased withholding tax on cash withdrawals by non-filers were widely criticized as burdensome and unclear by tax experts and business stakeholders.

In response, major business communities across Pakistan staged protests and strikes, describing the measures as "anti-business." On 19 July 2025, a nationwide strike was observed, with complete shutdowns in key markets, including Karachi’s New Sabzi Mandi for the first time. Leading chambers of commerce, including those in Karachi and Lahore, supported the strike, demanding the rollback of the new policies and restoration of previously abolished regimes. While some business groups entered talks with the government, others warned of further action if concerns remained unaddressed.

Corruption

Main article: Corruption in Pakistan

Corruption Perceptions Index for Pakistan compared to other countries, 2020

Corruption is an ongoing issue in the government, with claims of initiatives against it, particularly at the government and lower levels of police forces. In 2011, the country consistently ranked poorly on the Transparency International's Corruption Perceptions Index, with scores of 2.5, 2.3 in 2010, and 2.5 in 2009 out of 10. In 2011, Pakistan ranked 134th on the index, with 42 countries ranking worse. In 2012, Pakistan's ranking dropped further from 134 to 139, making Pakistan the 34th most corrupt country in the world, tied with Azerbaijan, Kenya, Nepal, and Nigeria. However, during the Sharif regime (2013–17), Pakistan improved its ranking to 117th out of 180 countries in 2017 (with an improvement in score from 28, 29, 30, 32, 32 [2013–17]), equal to Egypt (better than 59 countries). Due to the adverse effects of corruption on the country, the National Accountability Bureau (NAB) was established in 1999. The primary purpose of NAB was to recover looted money from corrupt elements and deposit it in the national exchequer. From 2018 to 2020, NAB recovered Rs 502 billion from corrupt elements, a record achievement. Since the bureau's inception, NAB has recovered Rs 814 billion directly or indirectly from corrupt elements, exceeding the recovery of other such anti-corruption organizations.

According to the IMF’s 2025 Governance and Corruption Diagnostic Assessment, Pakistan’s economy loses an estimated 5–6.5 percent of its GDP to corruption due to entrenched "elite capture," in which influential groups shape public policy for their own benefit. The system has led to market distortions and wastage of public resources.

Interference by Pakistan Military

The Pakistani military maintains significant influence over the country's economy, as illustrated by a July 2025 meeting between foreign exchange company representatives and a senior intelligence official, Major General Faisal Naseer of the Inter-Services Intelligence (ISI), to discuss the depreciation of the Pakistani rupee. While monetary policy and currency regulation traditionally fall under civilian institutions such as the State Bank of Pakistan, the involvement of a high-ranking military officer reflects the broader role the military plays in national economic matters.

According to Ayesha Siddiqa's Military Inc.: Inside Pakistan’s Military Economy, Pakistan's military controls a vast commercial network known as "Milbus," comprising businesses run for the personal benefit of military personnel but excluded from the official defense budget. These ventures include banks, factories, real estate, and retail operations, giving the military significant economic power. This financial autonomy strengthens the military's political dominance, distorts markets, and hinders democratic development by entrenching military influence in civilian affairs.

Despite Pakistan's severe economic crisis marked by hyperinflation, rising debt, and low foreign reserves, the military has remained financially insulated. Military assets grew from A$30 billion in 2016 to over A$39.8 billion, even as state reserves fell to A$5.2 billion and debt surged. In the same period, the military received an increased budget allocation of A$11.27 billion. Senior officers, including Generals Qamar Javed Bajwa and Asim Saleem Bajwa, reportedly amassed significant wealth, while military-run businesses continued to thrive. This resilience is attributed to the military's vast economic network, institutional autonomy, and strong political influence. In 2025 too, for instance, as Pakistan faced 38 percent inflation, low foreign reserves, and widespread poverty, the military elite reportedly remained insulated from the crisis. They maintained affluent lifestyles, exclusive housing, and substantial business interests, in contrast to the hardships faced by the broader population.

Poverty and Income inequality

Main articles: Poverty in Pakistan and Standard of living in Pakistan

In 1965, Pakistan’s chief economist Mahbub ul Haq asserted that 22 families dominated the country’s economic and financial sectors. He contended that these families controlled roughly two-thirds of industrial assets, 80 percent of banking, and 79 percent of insurance assets.

In 2015, Pakistan's pre-tax income distribution was highly concentrated at the top, with estimates indicating that the richest 1 percent received 30.2 percent of national income, the top 0.1 percent received 13.4 percent, and the top 0.01 percent received 5.1 percent.

The UNDP’s National Human Development Report (NHDR) 2020 stated that public spending in Pakistan had not benefited all income groups equally. The poorest category received only 14.2 percent of the overall share of expenditure, while the richest received 37.2 percent. According to NHDR 2021, the richest 20 percent held 49.6 percent of national income, compared with just 7 percent held by the poorest 20 percent.

Link between remittance inflows and migration trends

In 2024, personal remittance inflows to Pakistan accounted for 9.4% of the country's gross domestic product, a figure notably higher than India's 3.5% and significantly increased from the pre-COVID-19 level of 6%. This economic reliance on remittances reflects underlying challenges in domestic opportunities, which the 2024 report by the National Commission for Human Rights links to a rise in illegal migration. According to the report, over 6,000 Pakistanis undertook illegal journeys to Europe in 2023 alone.

Ease of doing business

Pakistan's economy faces significant challenges impacting its ease of doing business, including weak macroeconomic indicators, reliance on imports, and low foreign direct investment (FDI). Investors point to high inflation, complex regulations, inconsistent policies, poor intellectual property protection, corruption, political instability, and security concerns as key obstacles. Pakistan's Ease of Doing Business ranking fell from 61st in 2006 to 147th in 2018, before improving to 108th in 2020. To address these issues, the government secured a $3 billion IMF Stand-By Arrangement in 2023 and established the Special Investment Facilitation Council to attract foreign investment, especially from Gulf Cooperation Council countries.

Since 2022, many MNCs, including Eli Lilly, Shell, Microsoft, Uber, and Yamaha, have exited Pakistan, driven by a combination of sector-specific challenges, weak intellectual property enforcement, shrinking margins, and an unstable economic environment. Former Pakistan Business Council CEO Ehsan Malik cited delays in regulatory approvals, rising local competition, and a depreciating rupee as key reasons behind the retreat. He noted that pharmaceutical multinationals often exit due to prolonged delays in price adjustment approvals and the unethical marketing practices employed by certain local firms. In October 2025, Procter & Gamble (P&G) announced its exit after 34 years in the country, winding down the manufacturing and commercial operations of both P&G Pakistan and Gillette Pakistan Ltd. The company cited weak demand, high energy costs, and repatriation restrictions. Gillette's board endorsed the decision and began delisting procedures from the Pakistan Stock Exchange (PSX). Former Gillette CEO Saad Amanullah Khan stated that such corporate departures should serve as a wake-up call for policymakers, highlighting concerns over high operating costs, poor infrastructure, and regulatory pressures.

Startup funding in Pakistan dropped sharply from $355 million in 2022 to $43 million in 2024, an 88% decline. Analysts cite rupee depreciation, regulatory hurdles, and tax uncertainty as key factors, with industry performance lagging behind regional peers like India and Bangladesh.

As of 2025, Pakistan's FDI averaged just 0.6% of its GDP.

Debt

Main articles: National debt of Pakistan, Foreign aid to Pakistan, and Periods of stagflation in Pakistan

Map of countries by external debt in US$, 2006

According to the CIA World Factbook, in 2017, Pakistan ranked 57th in the world in terms of public external debt to various international monetary authorities (owing ~$107.527 billion in 2019), accounting for a total of 67.1% of GDP (in 2017).

Government debt and liabilities data is sourced from the State Bank of Pakistan.

List	Jun 2010	Jun 2011	Jun 2012	Jun 2013	Jun 2014	Jun 2015	Jun 2016	Jun 2017	Jun 2018	Jun 2019	Jun 2020	Jun 2021	Jun 2022	Jun 2023	Jun 2024	Jun 2025
(Amounts are in billion PKR.)
Gross public debt	9,010	10,771	12,697	14,292	15,991	17,380	19,677	21,409	24,953	32,708	36,399	39,866	49,242	62,881	71,246	80,518
Total debt of govt.	8,411	9,928	11,890	13,457	14,624	15,986	17,823	19,635	23,024	29,521	33,235	35,669	44,362	57,779	65,105	73,271
(Amounts are in billion US$.)
Public external debt	53.6	57.9	55.9	51.2	54.7	54.7	61.4	66.1	75.4	83.9	87.9	95.2	100.0	94.9	98.3	103.8
As % of GDP
Gross public debt	60.6	58.9	63.3	63.9	63.5	63.3	60.1	60.2	63.7	74.7	76.6	71.5	73.9	75.0	67.8	70.2
Total debt of govt.	56.6	54.3	59.3	60.1	58.1	58.3	54.5	55.2	58.7	67.4	69.9	63.9	66.6	68.9	61.9	63.9
Public external debt	30.8	27.2	26.4	22.7	21.5	20.3	19.6	19.5	23.4	31.2	31.1	26.9	30.5	32.3	26.0	25.7

Pakistan's external debt servicing includes the repayment of both the principal amount borrowed and the accrued interest.

Amounts are in million US$.

List	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024
Principal	3,140	2,458	3,294	5,046	5,659	3,499	3,076	4,439	3,326	6,527	9,630	10,188	11,577	15,061	9,273
Interest	1,015	1,074	1,019	933	909	1,172	1,346	1,626	2,317	2,951	3,229	2,229	2,985	4,421	5,457
Total	4,155	3,532	4,313	5,979	6,568	4,671	4,422	6,065	5,642	9,478	12,859	12,417	14,562	19,482	14,730

See also

• List of companies of Pakistan
• Trade unions in Pakistan
• Nationalisation in Pakistan
• Privatisation in Pakistan
• Economy of Punjab, Pakistan
• Economy of Sindh
• Economy of Khyber Pakhtunkhwa
• Economy of Balochistan, Pakistan
• Economy of Azad Kashmir
• Economy of Gilgit Baltistan

External links

• Statistics Division, Government of Pakistan
• Ministry of Finance, Government of Pakistan
• Ministry of Commerce, Government of Pakistan
• World Bank Summary Trade Statistics Pakistan
• Pakistan. The World Factbook. Central Intelligence Agency.