Economic Survey 2004-05

Growth and Investment:

Real GDP grew by 8.4 % in 2004-05 as against 6.4% last year and surpassed the target of 6.6% by a wide margin.  This is because of a steller performance in large-scale manufacturing (15.4%), agriculture (7.5%) and services sector (7.9%).

Agriculture grew by 7.5% in 2004-05, which is higher than actual growth of 2.2% last year and a target of 4.0 percent.

The overall manufacturing, accounting for 18.3% of GDP repeated stellar performance by registering a growth of 12.5% in 2004-05 as against 14.1% last year and surpassing its target by 2.3%.  Accordingly, its share in GDP also increased by 0.7% over last year.

The construction sector is provisionally estimated to grow by 6.2% in 2004-05 as against a decline of 6.9% last year.

The services sector has registered an impressive growth of 7.9% in 2004-05 as against an equally robust growth of 6.0% last year and against the target of 6.2% for this year.

The wholesale & retail trade, finance & insurance sub-sectors grew by 12.0 and 21.8% respectively against 8.1% and 4.5%.

The commodity producing sectors (agriculture and industry) and service sector contributed equally to the real GDP growth of 8.4%.  The commodity-producing sector contributed 50% or 4.2% to this year's growth while the remaining 50% or 4.2% contribution came from services sector.  Within the CPS, agriculture contributed 1.74% or 20.7% to overall growth while industry contributed 2.46% or 29.3%.

The per capita income in dollar has grown at an average rate of 13.5% per annum during the last three years rising from $579 in 2002-03 to $657 in 2003-04 and further to $736 in 2004-05.  The major factor responsible for the sharp rise in per capita income include acceleration in real GDP growth, stable or even appreciation in exchange rate and four fold increase in the inflows of workers' remittances.

Total investment provisionally estimated at 16.9%, slightly lower than last year 17.3%.  Fixed investment as percentage of GDP is estimated at 15.3% as against 15.6% last year.  Public Sector investment declined from 4.8% to 4.4%.  Private sector investment rose marginally to 10.9%.

Annual GDP Growth Rate in Percent (1997-2005)


GDP Growth Rate (%)


















Agriculture accounts for nearly 23% of Pakistan's national income (GDP) and employs 42% of its workforce.  Most importantly, 67.5% of country's population living in rural areas are directly or indirectly dependent on agriculture for their livelihood.  Government of Pakistan attaches high priority to raising agricultural productivity with a view to promoting faster agricultural growth and hence, raising farmers income.

During the last three years (2002-05), Pakistani witnessed a modest recovery in agriculture growth after a two-year unprecedented draught.

14.6 million bales of cotton produced and 21.1 million tons of wheat produced during the year, as against the production of 10.05 million bales and 19.5 million tones last year.

Rice production increased from 4.848 million tons last year to 4.991 million tons in 2004-05.

Sugarcane production decreased from 53.419 million tons in 2003-04 to 45.316 million tons in 2004-05, showing a decrease of 15.2%. 

As regards the minor crops, the production of chillies and onions increased by 34.7% and 25.4% respectively during 2004-05.

The production of potato also decreased by 2.7%.

Lesser production over last year is due to shortfall in urea.  Excessive rain also damaged some minor crops.

Major crops registered stellar growth of 17.3% as against 1.8% last year.  Minor crops grew by 3.1% as against 2.6% last year.

The performance of livestock, fisheries and forest grew by 2.3%, 2.1% and 0.4% respectively.

Manufacturing, mining and investment policies:

The overall manufacturing, accounting for 18.3% of GDP, registered an impressive growth of 12.5% against the target of 10.2% and last year's achievement of 14.1%.  Overall manufacturing is growing at a much faster pace than agriculture and services and if this pace is sustained its share in GDP is likely rise even further in the medium-term.

The main contributors to this impressive growth of 15.4% in July to March 2004-05 over last year are:

The major items that registered positive growth are:

The individual items exhibiting negative growth include: sugar (21%), vegetable ghee (1.9%), bicycles (14.8%) and billets (20.5%).

The output of the mining and quarrying sector grew by 5% this year as against the rise of 3.8% last year.  The principal minerals which have shown positive growth are:

While negative growth was exhibited by dolomite (22.2%), gypsum (52.9%), and magnetite (12.5%).

Foreign direct investment has witnessed an increase of 17.2% in the first ten months (July to April, 2004-05), whereas, net foreign private investment stood at US $ 1027 million against US $ 629.1 million last year, thereby, showing increase of $ 397.9 million.  The increase in foreign private investment is because of the inflow of portfolio investment of $ 135.5 million as compared to inflow of $ 131.3 million in the comparable period last year.

Net Inflow of Foreign Investments





2004-05 (upto May)


























Hong Kong















Saudi Arabia






























Source: State Bank of Pakistan

The privatisation programme maintained its pace during 2004-05 and succeeded in privatising some high-ticket items.  By the end of April 2005, Pakistan had completed or approved 146 transactions at gross proceeds of Rs. 148.3 billion.  Of this an amount of Rs. 13.5 billion was received during the period July to April 2004-05 from the sale off the Government's shareholding in PIA, KESC, KAPCO, Gharibwal Cement, and Falleti's Hotel.  In June 2005, the Government also privatised PTCL by selling 26% of its holdings to a foreign company from Dubai, Etisalaat.  Government also sold its major shareholdings in Habib Bank Limited to Aga Khan group of investors in the current FY.  The major shareholdings in United Bank Limited were already sold to a foreign investor from UAE, and some of the shareholdings were also publicly offered during the current FY.


The Government of Pakistan adopted a strategy for poverty reduction in 2001, focusing on five areas which include:

            (i) accelerating economic growth and maintaining macroeconomic stability,

            (ii) investing in human capital,

           (iii) augmenting targeted interventions,

           (iv) expanding social safety nets, and

            (v) improving governance.

During this period, the economic growth has accelerated and the country had achieved macro-economic stability.  Sound macroeconomic policies and implementation of structural reforms in almost all sectors of the economy have transformed Pakistan into a stable and resurgent economy in recent years.  Agriculture, SMEs, and housing & construction have been prioritised in accordance with their potential to provide employment to the poor segments of the society.  SMEs are an important conduit for labour absorption and thereby reducing unemployment and poverty.

Poverty and social sector related expenditures under the PRSP have increased over 120% in the last four years, from Rs. 114 billion in 1999-2000 to Rs. 254 billion in 2003-4 to Rs. 278 billion in 2004-05.

Fiscal Development:

As a result of pursuance of prudent fiscal policy, Pakistan has succeeded in reducing fiscal deficit down from an average of 7% of the GDP in the 1990s to 2.3% last year and at around 3% in the current fiscal year.  The associated public debt burden also declined sharply from over 100% of GDP to less than 60% in the current fiscal year.  The revenue deficit has been narrowed from 3% of GDP in the late 1990s to 0.2% and the primary balance has remained in surplus for the last many years.

Tax collection by CBR has picked up, the overall budget deficit as percentage of GDP has declined the revenue deficit has been narrowed, and the primary surplus has increased.  During the last six years, tax collection has increased by 70%.  CBR has collected Rs. 451.1 billion as net revenue receipts during July-April 2004-05, exceeding the target by around Rs. 7 billion.  When compared with last year's collection of the corresponding period, this collection indicates a healthy growth of 13.6%, whereas the gross collection has increased by 14.5%.

Total expenditure is estimated Rs. 1050.4 billion in 2004-05, which is 9.9% higher than last year.  Of this current expenditure is estimated at Rs. 866 billion (82.4% of total expenditure) while development expenditure is amounted to Rs. 188 billion (17.6% of total expenditure).  The current expenditure which was 14% of GDP last year has declined to 13.2% in the current year.  However, there as no change in development expenditure as percent of GDP which remain stagnant at 2.9% of GDP in 2003-04 and 2004-05.  The share of interest payments in total expenditure declined from 32.7% in 2000-01 to 20.2% in 2004-05 while that in current expenditure, dropped from 36.3% in 2000-01 to 25.3% in 2003-04 and further to 24.6% in 2004-05.  In line with reduction in debt burden, the interest payments burden dropped from 3.5% last year to 3.3% of GDP in 2004-05.

Defence expenditure in 2004-05, amounting to Rs. 194 billion is 7.5% higher than last year.  However, as percentage of GDP, it has dropped from 3.3% last year to 3% this year.  As percentage of total outlay, defence spending has declined marginally from 18.8% to 18.5% this year.  Similarly, as percentage of current expenditure it has declined from 23.3% to 22.4% in the same period.

The public debt to GDP ratio which stood at almost 85% in end June 2000, declined substantially to 59.4% in end March 2005.  In absolute terms, public debt grew by 3.8% during the first nine months (July to March) of the current FY.  It is important to note that the growth in public debt has slowed considerably in recent years because of the prudent debt management.  Public debt was 317% of total revenue in end June 1980, increased to 505% by the end of 80s and further to 627% by the end of 90s.  The public debt burden in relation to total revenue has declined substantially to 457% as of end March 2005.

As percent of GDP, domestic debt is expected to decline sharply from 36.4% to 30.8%, a decline of almost 6% in domestic debt burden.  During the last 5 years (2000-05), the real cost of domestic borrowing averaged 4.1%, mainly on account of relatively low inflation.  Accordingly the real cost of borrowing for public debt averaged 2.9% during the last five years (2000-05).  The combined effect of growth in revenue and debt resulted in a sharp decline (6.4% per annum) in the country's debt burden.

Money and Credit:

The financial services sector in Pakistan has been going through a major reform process for the last several years.  The State Bank of Pakistan has also strengthened its regulatory capacity.  It is now more proactive in aligning its regulatory profile in a rapidly changing domestic and global financial environment.  As a result of such reforms, the Pakistani banks are strengthened to compete with foreign banks both in the domestic market and internationally.  Financial sector reforms has brought marked improvement in the financial health of the commercial banks in terms of capital adequacy, profitability and asset quality and also greater attention to risk management.

The broad money (M2) showed a growth of 13.1% (Rs. 325.6 billion) during July-March 2004-05 compared with the full year revised target of 14.5% (Rs. 360 billion) and the actual growth of 12.3% (Rs. 254.8 billion) in the corresponding period of last year.

Budgetary borrowings of the government amounted to Rs. 5.8 billion during July-March 2004-05 against the annual target of Rs. 60 billion and the actual borrowings of Rs. 53.6 billion in the same period last year.

Non performing loans (NPLs) of commercial banks, specialised banks, and DFIs have declined during the first nine month of 2004-05 from Rs. 220 billion in June 2004 to Rs. 203.7 billion in March 2005, a reduction of 7.4%.  The process of privatisation continued as fast track with the privatisation of HBL in 2004.  Shares of NBP were also offloaded through local stock exchanges.  As a result of privatisation and restructuring, more than 80% of the banking assets are now owned and managed by the private sector.  The government is also in the process of restructuring of IDBP, ZTBL and SME bank for their ultimate privatisation.

Khushhali Bank's efforts over the past four years have been to develop an efficient distribution system capable of handling large volume of business across diverse operating environments while at the same time, developing an insight into the market.  Today, Khushhali Bank has a network of 130 service outlets across 64 districts of the country, has processed nearly 400,000 loans valuing about Rs. 4 billion and with a predominantly rural portfolio.

Bank credit to SMEs sector continued to expand considerably as its share in total private sector credit rose from 7.9% (Rs. 5.2 billion) during July-September 2004 to 18.1% (Rs. 59.9 billion) during July-February 2004-05.

Capital Market:

As a result of successful implementation of the successive reform measures the capital market in Pakistan has been growing by leaps and bounds and has emerged as one of the important pillars of the economy.  Under the new privatisation strategy, the government is selling off its shares of state controlled enterprises by listing them on the bourses as well with a view to broadening and deepening the capital markets.  During July-March 2004-05 the KSE 100 shares index rose from 5,279 points to 7,770 points, an increase of 47.2%.  During this period the AMC rose from Rs. 1,357.5 billion to Rs. 2,114.8 billion, thus showing a growth of 55.8%.  The Karachi Stock Market remained as one of the five best performing markets around the world with rate of returns in dollar term of 100%.

Total turnover of shares on the KSE was 71.7 billion in the first nine months of 2004-05 as compared to 65.2 billion in the same period last year.  In the early part of 2005, the Karachi Stock Exchange witnessed an accelerated rise with KSE 100 index rising by 65% in a period of just 2 1/2 months to a record level of 10,303 on 15th March, 2005.  The stock market turned bearish since March 16, 2005 and the KSE 100 index dropped to as low as 6,939 as on April 12, 2005 from its peak of 10,303 on 15th March, 2005 showing a decline of 32.7%.  Notwithstanding this sharp fall there were no broker defaults in the stock market and also market was not closed or suspended, as had been the case in some previous market falls.

Although market faced extreme volatility in the month of March 2005 however, for the period beginning January to March 2005 the KSE performed better than the other regional markets.  The KSE 100 index increased by 24% from 1st January 2005 till 28th March 2005 as compared to the other regional markets.  The Sensex-Mumbai Index during the same period declined by 2%, and the Hong Kong Han Seng Index declined by 4%.  The Thailand SET and the all Singapore SES Index during the same period increased by 3% and 5% respectively.

The SECP in consultation with the stock exchanges has introduced significant capital market reforms in the fields of risk management, governance, transparency and investor protection.  The reform measures provided include the following:

(a) measures for strengthening risk management at the exchanges,

(b) amendments in the listing regulations of the exchanges relating to rotation of auditors,

(c) prohibition on use of group account by central depository system participants,

(d) internet trading guidelines, 2005, and

(e) demutualisation of stock exchanges.


For the first 10 months of the current fiscal year, inflation as measured by the Consumer Price Index (CPI), averaged 9.3%, compared to 3.9% for the corresponding period last year.

While food price inflation was recorded at 12.8% compared to 4.9% for the same period last year, non-food inflation increased to 6.9% versus 3.3%  in the comparable period of last year.

Core inflation, also indicated a rising trend 7.4% for the first 10 months of 2004-05.

The largest contributions to the acceleration in CPI have come from:

Contributing factors to the rise in inflationary pressure in the economy points to the fact that a phenomenal increase in aggregate demand in the economy, on the one hand, was compounded by supply shocks of principal commodities, on the other.

The government responded in a multi-pronged manner to the rise in the price-level.  First a high level committee was constituted to monitor the price situation on daily basis by keeping a close watch on the supply and demand conditions.  The government also did not pass on the entire increase in the international price of oil to general consumers.  To ease off the demand pressures generated by the rising level of economic activity, the State Bank of Pakistan began to tighten monetary policy rather aggressively.  Like in  Federal Government where price situation is reviewed weekly, the provincial governments have been asked to the same in their respective capitals and take necessary measures, if required, to stabilise prices of essential commodities.  The easing of demand pressure through monetary policy and improving the supply situation of food items either through raising their production or through imports are likely to downward pressure on general price level in coming months.

Ratio of CPI Inflation (1998-2005)


Inflation (%)













2004-05 (for 11 months)


Trade and Payments:

The strengthening of domestic demand triggering a pickup in investment spending after a multi-year lull, has fuelled Pakistani import growth.  Higher global oil prices further added to a massive surge in imports which more than offset the improved outcome from exports and accordingly were the key drivers of the widening trade gap.

Exports were up by 14.6% during the first 9 months of the FY 2004-05, rising to $ 10,206.6 million from $ 8,905.2 million in the same period last year.  One-half of the net increase in exports amounting to $ 650.7 million has come from the non-traditional export items.

Imports during this period were up by 37.8%, rising from $ 10,497.4 million to $ 14,468.6 million.  The extra-ordinary increase in import owes mainly to strengthening domestic demand and higher prices of crude oil and petroleum products.  The surge in domestic demand fuelled an exceptional 41.5% increase in non-food non-oil imports (in particular machinery, chemicals and metal groups, consisting of one-half of total imports).  The unprecedented rise in oil prices pushed the oil import bill up 30.9% to $ 2,760.5 million, caused a relatively larger increase in overall imports than exports.

As a result trade deficit has widened to $ 4,262 million as against $ 1,592.3 million in the same period last year.

Pakistan's current account balance has slipped into red in 2004-05 after posting surpluses for three consecutive years.  The current account deficit, excluding official transfers stood at $ 1,358 million during July-March 2004-05 as against a surplus of $ 1,505 million in the same period last year.  The deterioration in the current account was driven by substantially wider trade deficit owing to higher oil import bill and hefty gains in non-oil imports resulting from strong domestic demand.

Exports and Imports (1998-2005)


Exports (US $ Million)

Imports (US $ Million)



















2004-05 (11 months)








External Debt and Liabilities:

Following a credible strategy of debt reduction, Pakistan has succeeded in reducing the rising trend in external debt and foreign exchange liabilities which has declined by $1.24 billion, down from $ 37.86 billion in 1999-2000 to $ 36.62 billion by end March 2005.  However, the external debt and liabilities during July-March 2004-05 amounted to $ 36.62 billion are showing an increase of 3.9% over the last year.  The rise in absolute amount of the stock of debt ($1,365 million) during this period is the result of valuation effect and the net inflow effect.

As percentage of GDP, external debt and liabilities stood at 51.7% in end June 2000, declined to 36.7% in end June 2004 and further to 33.1% in end March 2004-05.  It may be pointed out that Pakistan's external debt and liabilities were 22 times of its foreign exchange reserves in 1998-99 but declined sharply to 2.8 times in six years.

During 2000-05, the real growth of external debt burden witnessed massive decline (13.1% per annum) on account of almost 14.7% real growth in foreign exchange earnings, decline in real cost of borrowing (-0.2%) and marginal (1.6%) rise in real growth of external debt.

These developments helped Pakistan to enter into the capital market by issuing Eurobond as well as Islamic bond (Sukuk) worth $ 500 million and $ 600 million, respectively.


Government of Pakistan has adopted this sector as one of the pillars for poverty reduction and benefit of masses.  Existing National Education Policy 1998-2010 was formulated keeping in view the prevailing problems in the society.  The government has initiated major administrative reforms such as Devolution of Power and Education Sector Reforms.  Moreover, Millennium Development goals (MDGs) and Education For All (EFAs) are the international policy concerns announced in 2000, which need to be properly reflected in our policy.  As such, the Ministry of Education has taken in hand an exercise to review the National Education Policy (1998-2010) for its updating to bring it in line the current needs of the country.

Overall literacy rate of 52%, according to Government, has increased by about 2% compared to that of Labour Force Survey (LFS), 2001-02.

Major progress has been made in the first two years of the Higher Education Commission, with the establishment and execution of transparent system for award of indigenous and foreign Ph.D. Scholarships with the aim of enhancing local research activities and developing future faculty member.  Over eleven hundred indigenous Ph.D. Scholarships have been awarded.  Furthermore, increased opportunities have been provided for Ph.D. scholars, selected via rigorous testing and screening process, to pursue their studies in industrially advanced nations such as China, France, Germany, UK, USA and Austria.  In-service teachers were supported through various teacher training programmes training.  More than 200 faculty member benefited from these programmes.

Federal Government has decided to encourage the private sector to play its due role in the promotion and development of educational opportunities especially in the rural areas.  This policy has resulted in the establishment of an estimated 30,000 private educational institutions at all levels with an enrolment of approximately 3 million students.  Enrolment in private primary schools is now in the order of 42% of total enrolment in 2004.  During 2004, at the middle school level, the private sector had a share of 37% of total enrolment.  At the secondary and higher secondary level in the same year, the private sector share was 30% and 64% respectively of the total enrolment.

Health and Nutrition:

The public health sector is a priority area of Government activities.  Under the commitment to achieve the goals of 'Health for all' the agenda of Millennium Development Goals for health and human development is being implemented and a broad based strategy under the poverty reduction strategy paper (PRSP) to attend the imbalances in health sector has been prepared.  The existing network of medical services consists of 916 hospitals, 4582 dispensaries, 5301 basic health units (BHUs), 552 rural health centres (RHCs), 906 maternity and child health centres (MCHs) and 289 TB centres (TBCs).  In the calendar year 2004, there was one doctor 1359 persons, one dentist for 25107 persons, one nurse for 3175 persons and one hospital bed for 1540 persons.  The total outlay on health sector is budgeted at Rs. 38 billion which has increased by 15.8% over last year and as percent of GDP, it is 0.57%.  The new health facilities added to the overall health services include construction of 45 new facilities, upgrading of 40 existing facilities, and addition of 3500 new doctors, 1700 nurses and 17000 lady health workers.  to reduce the incidence of diseases and promote the health status of people, various health programmes like Family Planning and Child Immunisation Programme, AIDS Prevention, Cancer Treatment, Drug Abuse, TB and Malaria Control Programmes had been carried out during the current year.

Population, Labour Force and Employment:

During the last 50 years, Pakistan's population has increased from 33 million to 152.53 million in 2004-05.  Although the current population growth rate slowed to 1.9% per annum, overall population has increased by 2.76 million people as compared to last year.

Total labour force has increased from 41.38 million in 2001 to 45.76 million in 2004.  Of this 99.25 million of work force is in the rural areas and 51.22 million as in the urban area.

Agricultural sector has absorbed 17.97 million of the total employed labour force.

About 3.52 million people were estimated to be unemployed in fiscal year 2004-05 as compared to 3.72 million last year.

Transport & Communications:

Pakistan's achievement in building high and low types of roads have been quite credible.  As on March 2005, the total length of roads in the country was 259,758 kilometres, including 162,879 kilometres of high type (63%) and 96,879 kilometres of low type roads (37%).  During 2004-05, the length of high type roads has increased by 2.7%.  The construction work on Islamabad-Peshawar Motorway (M1) is in progress.

During the first nine months of the current FY, Pakistan Railway carried 61.3 million passengers and 4.9 million tons of freight.  Its gross earnings stood at Rs. 13.2 billion, against Rs. 10.6 billion last year, which was higher by 25%.

PIA carried 3.83 million passengers  during the first nine months of the current FY as against 3.69 million passengers in the same period last year.  Both passenger capacity and traffic volume increased by 14.5% and 9.1%, respectively.  Its fleet consists of 49 aircrafts of various types.  There are presently three airlines, i.e., PIA, Shaheen Airlines and Aero Asia, operating in the country two of them are providing both domestic and international services.

Karachi Port has handled 21.8 million tons of cargo during the first nine months of the current FY, compared to 20.5 million tons of cargo during the same period last year, showing an increase of 6.6%. 

The Port Qasim has handled 16 million tones of cargo during the first nine months of the current FY, as against 11.2 million tones of cargo handled during the same period last year, showing an increase of 43%.

The Gwadar Port is being built with Chinese assistance and its first phase has almost completed.

In 1999-2000, there were only 0.3 million cellular mobile subscribers in Pakistan which jumped to 2.4 million by 2002-03 as a result of introduction of CPP regime and addition of another mobile operator (i.e., Ufone).  Mobile subscription continued to rise at an unprecedented pace, reaching 5 million by 2003-04.  Major turnaround was witnessed when the mobile companies started giving free mobile connections and bearing the cost of government levies themselves.  In a short period of 10 months in the outgoing fiscal year, more than 5 million new subscribers have been added to the list, reaching over 10.5 million by end April 2005.  In other words more than 100% increase in subscribers in just 10 months was unprecedented.  Accordingly, the teledensity with respect to cellular mobile has jumped from 0.2% in 1999-2000 to 7% in 2004-05.  When comparing to India, where there are around 40 million mobile users with teledensity of just 3.5%, Pakistan has done remarkably best.

For promotion of information technology, 1900 cities/towns/villages have been provided internet facility, upto March 2005.  Total telephone lines installed by March 2005 were 5.5 million  as against 4.4 million up to June 2004 last year.

This year two mobile companies were issued licenses and allowed to enter into the market, i.e., Telenor and Warid Telecom.  An existing AMPS mobile company Paktel introduced its GSM services and start giving mobile connections absolutely free.  Moreover, a Wireless Local Loop (WLL) company GO CDMA offered its services and provide the consumers wireless phones with lots of features like voice messaging, SMS, Prepaid facility, call conference, CLI, etc. for the first time in Pakistan's short telecom history. 

On 18th June 2005, 26% of Government holdings in PTCL shares were sold to a Dubai company, namely, Etisalaat at $ 1.96 per share, even after a mass agitations of PTCL trade union activists and other workers, which result into an agreement between the Government and PTCL trade union activists.


The consumption of energy is one of the critical indicators of the level of development of any country.  Developed countries use more energy per unit of economic output and far more energy per capita than developing countries.  At present, over a billion people in the industrialised countries use some 60% of the world's commercial energy supply, while 5 billion people living in the developing countries consume the remaining. 

During July-March 2004-05, the production of crude oil per day has increased by 66,508 barrels, from 62,122 barrels per day during the same period last year, showing an increase of 7.1%.  The over all production of crude oil has increased to 18.1 million barrels during July-March 2004-05, from 17.1 million barrels during the comparable period last year, showing an increase of 5.8%.  On average the consumption of petroleum products of different sectors during the last 14 years (1990-2004) are:

The production of natural gas per day has stood at 3,681 million cubic feet during the first nine months of the current FY, as compared to 3,210 million cubic feet in the same period last year, showing an increase of 14.7%.  Production of gas has increased to 1,003,198 million cubic feet during the first nine months of current FY, as compared to 882,684 million cubic feet during the same period last year, showing an increase of 13.6%.  On average different sectors of the economy consumes gas during the last 14 years from 1990 to 2004 are:

The installed capacity of electricity (hydel and thermal) has increased by 0.7% during the first nine months of the current FY and stood at 19,389 MW.  Total installed capacity of WAPDA stood at 11,298 MW during July-March 2004-05 of which hydel generation was 6,463 MW (57.2%) and thermal was 4,835 MW (42.8%).  During first three quarters of current fiscal year 61,759 GW electricity has been generated as against 56,145 GW were produced in the same period last year, showing an increase of 10%.  The number of villages electrified has increased to 87,698 during July-March 2004-05, from 78,820 in 2003-04, showing an increase of 11.3%.

Presently, some 700 CNG stations are operating in the country while 200 are under construction.  By March 2005 about 700,000 vehicles were converted to CNG as compared to 450,000 vehicles during the same period last year, showing an increase of about 56%.  With these developments Pakistan has become the leading country in Asia and the third largest user of CNG in the world after Argentina and Brazil.

Environment and Housing:

(a) Environment:

In Pakistan, the environmental situation has risen due to a number of factors including high population growth rate, lack of public awareness and education, mismanagement of water and other natural resources as well as unplanned urban and industrial expansion.

Draft of 'National Environmental Policy 2005' which has been approved by the Prime Minister in principle and is being circulated to larger stakeholders for comments.  Once approved, it would be country's first ever 'environmental policy'.  This policy would compliment the objectives of NEAP-SP and will address the sectoral issues like:

            (i) water management and conservations

            (ii) energy efficiency and renewable

            (iii) agriculture and livestock

           (iv) forestry and plantation

            (v) biodiversity and protected areas

            (vi) climate change, air quality and noise, and

           (vii) pollution and waste management.

In addition, the proposed policy aims to address other cross-sectoral issues such as:

           (i) Population and environment

            (ii) gender and environment

           (iii) health and environment

            (iv) trade and environment

            (v) poverty and environment

            (vi) environment and local government

The key factors contributing to air pollution in Pakistan are:

            (i) rapidly growing energy demand, and

           (ii) a fast growing transport sector.

In the cities widespread use of low-quality fuel, combined with a dramatic expansion in the number of vehicles on roads, has led to significant air pollution problems.  Rickshaws have grown by more than 59%, while motorcycles and scooters have almost doubled over the past ten years.  This data does not include locally assembled diesel engine turned 'auto carts' used in rural areas.  Motorcycles and Rickshaws due to their two-stroke engines, are the most inefficient in burning fuel and contribute most to emissions.

Pakistan is the largest user of CNG in Asia and presently, some 700 CNG stations are operating in the country while 200 are under construction.  By March 2005, about 700,000 vehicles were converted to CNG as compared to 450,000 vehicles during same period last year, showing an increase of 56%.  After the successful CNG programme for petrol replacement, the government is now embarking upon a programme to replace the more polluting diesel fuel in the road transport sector.

Per capita water availability in Pakistan has been decreasing at an alarming rate.  In 1951, per capita availability was 5,300 cubic meters, which has now decreased to 1,105 cubic meters just touch water scarcity level of 1,000 cubic meters.  The existing water resources are under threat due to rapid degradation, soil erosion, deforestation and untreated discharge of municipal and industrial wastes to rivers and other water bodies.

Plans are underway to extend the coverage of clean drinking water from 63% to 70% in 2005-06 and sanitation from 40% to 55% in the same period.  It is targeted to provide 93%  of population with access to clean drinking water by 2015 and 90% of the population with access to sanitation.

It is estimated that about 38% of Pakistan's irrigated land is water logged, 14% is saline.  In the urban areas, less than 60% of solid waste is collected.  No city in Pakistan has proper waste collection and disposal system for municipal or hazarders wastes.  our industries use about 525 types of chemicals and dyes/colours in different processing industries.  Their processing generates wastes causing contamination of soil and pose potential risk to public health and damage the fertility of cropland.

The National Conservation Strategy (NCS) has represented a National Environment Action Plan (NEAP).  The main objectives of NEAP are to safeguard public health, promote sustainable livelihood and enhance quality of life for the people of Pakistan. 

(b) Housing Sector:

Realising the potentials of housing and construction as productive sector of the economy, the present Government has declared housing and construction as a priority industry and also formulated a pragmatic and workable National Housing Policy with a view to:

            (i) accelerate housing activity and contribute towards employment generation and economic development,

           (ii) facilitate provision of housing inputs including land, finance, building materials, institutional and legal framework,

            (iii) analyse the culture of poverty and the forces generating ever-increasing slums and katchi abadis including political, public, socio-economic, bureaucratic and environmental forces,

            (iv) promote ways and means for housing development by enhancing affordability, saving capacity, human tendencies and potential,

           (v) provide safeguards against malpractices, bureaucratic inefficiencies, institutional weaknesses and mafia assaults, and

           (vi) particularly for the low income groups.

Tables & Graphs:

1.        Annual GDP Growth Rate in Percent (1997-2005)

2.        Net Inflow of Foreign Investments

3.        Development & Current Expenditure (FY: 2004-05)

4.        Ratio of CPI Inflation (1998-2005)

5.        Exports & Imports (1998-2005)

6.        Consumption of Petroleum Products (FY: 2004-05)

7.        Consumption of Gas (FY: 2004-05)








1.        Prof. Dr. Kh. Amjad Saeed, Economy of Pakistan

2.        A. Hamid Shahid, Economic Planning w.r.t. Pakistan


1.        ICMAP, Management Accountant

2.        ICAP, Pakistan Accountant



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