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India vs. Pakistan

Economy

IndiaPakistan
Economy - overviewIndia is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization measures, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and have served to accelerate the country's growth, which averaged under 7% per year since 1997. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly more than half of the work force is in agriculture, but services are the major source of economic growth, accounting for nearly two-thirds of India's output, with less than one-third of its labor force. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services, business outsourcing services, and software workers. In 2010, the Indian economy rebounded robustly from the global financial crisis - in large part because of strong domestic demand - and growth exceeded 8% year-on-year in real terms. However, India's economic growth began slowing in 2011 because of a slowdown in government spending and a decline in investment, caused by investor pessimism about the government's commitment to further economic reforms and about the global situation. High international crude prices have exacerbated the government's fuel subsidy expenditures, contributing to a higher fiscal deficit and a worsening current account deficit. In late 2012, the Indian Government announced additional reforms and deficit reduction measures to reverse India's slowdown, including allowing higher levels of foreign participation in direct investment in the economy. The outlook for India's medium-term growth is positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. India has many long-term challenges that it has yet to fully address, including poverty, corruption, violence and discrimination against women and girls, an inefficient power generation and distribution system, ineffective enforcement of intellectual property rights, decades-long civil litigation dockets, inadequate transport and agricultural infrastructure, limited non-agricultural employment opportunities, inadequate availability of quality basic and higher education, and accommodating rural-to-urban migration.Decades of internal political disputes and low levels of foreign investment have led to slow growth and underdevelopment in Pakistan. Agriculture accounts for more than one-fifth of output and two-fifths of employment. Textiles account for most of Pakistan's export earnings, and Pakistan's failure to expand a viable export base for other manufactures has left the country vulnerable to shifts in world demand. Official unemployment is under 6%, but this fails to capture the true picture, because much of the economy is informal and underemployment remains high. Over the past few years, low growth and high inflation, led by a spurt in food prices, have increased the amount of poverty - the UN Human Development Report estimated poverty in 2011 at almost 50% of the population. Inflation has worsened the situation, climbing from 7.7% in 2007 to almost 12% for 2011, before declining to 10% in 2012. As a result of political and economic instability, the Pakistani rupee has depreciated more than 40% since 2007. The government agreed to an International Monetary Fund Standby Arrangement in November 2008 in response to a balance of payments crisis. Although the economy has stabilized since the crisis, it has failed to recover. Foreign investment has not returned, due to investor concerns related to governance, energy, security, and a slow-down in the global economy. Remittances from overseas workers, averaging about $1 billion a month since March 2011, remain a bright spot for Pakistan. However, after a small current account surplus in fiscal year 2011 (July 2010/June 2011), Pakistan's current account turned to deficit in fiscal year 2012, spurred by higher prices for imported oil and lower prices for exported cotton. Pakistan remains stuck in a low-income, low-growth trap, with growth averaging about 3% per year from 2008 to 2012. Pakistan must address long standing issues related to government revenues and energy production in order to spur the amount of economic growth that will be necessary to employ its growing and rapidly urbanizing population, more than half of which is under 22. Other long term challenges include expanding investment in education and healthcare, adapting to the effects of climate change and natural disasters, and reducing dependence on foreign donors.
GDP (purchasing power parity)$4.761 trillion (2012 est.)
$4.579 trillion (2011 est.)
$4.25 trillion (2010 est.)
note: data are in 2012 US dollars
$523.9 billion (2012 est.)
$505.3 billion (2011 est.)
$490.4 billion (2010 est.)
note: data are in 2012 US dollars
GDP - real growth rate6.5% (2012 est.)
7.7% (2011 est.)
11.2% (2010 est.)
3.7% (2012 est.)
3% (2011 est.)
3.1% (2010 est.)
GDP - per capita (PPP)$3,900 (2012 est.)
$3,800 (2011 est.)
$3,600 (2010 est.)
note: data are in 2012 US dollars
$2,900 (2012 est.)
$2,900 (2011 est.)
$2,900 (2010 est.)
note: data are in 2012 US dollars
GDP - composition by sectoragriculture: 17.4%
industry: 26.1%
services: 56.5% (2012 est.)
agriculture: 20.1%
industry: 25.5%
services: 54.4% (2012 est.)
Population below poverty line29.8% (2010 est.)22.3% (FY05/06 est.)
Household income or consumption by percentage sharelowest 10%: 3.6%
highest 10%: 31.1% (2005)
lowest 10%: 3.9%
highest 10%: 39.3% (FY05/06)
Inflation rate (consumer prices)9.3% (2012 est.)
8.9% (2011 est.)
9.7% (2012 est.)
11.9% (2011 est.)
Labor force486.6 million (2012 est.)59.21 million
note: extensive export of labor, mostly to the Middle East, and use of child labor (2012 est.)
Labor force - by occupationagriculture: 53%
industry: 19%
services: 28% (2011 est.)
agriculture: 45.1%
industry: 20.7%
services: 34.2% (2010 est.)
Unemployment rate8.5% (2012 est.)
9.8% (2011 est.)
6.2% (2012 est.)
5.6% (2011 est.)
note: substantial underemployment exists
Distribution of family income - Gini index36.8 (2004)
37.8 (1997)
30.6 (FY07/08)
41 (FY98/99)
Budgetrevenues: $169.4 billion
expenditures: $267.7 billion (2012 est.)
revenues: $27.48 billion
expenditures: $42.15 billion (2012 est.)
Industriestextiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software, pharmaceuticalstextiles and apparel, food processing, pharmaceuticals, construction materials, paper products, fertilizer, shrimp
Industrial production growth rate3.1% (2012 est.)3.4% (2012 est.)
Agriculture - productsrice, wheat, oilseed, cotton, jute, tea, sugarcane, lentils, onions, potatoes; dairy products, sheep, goats, poultry; fishcotton, wheat, rice, sugarcane, fruits, vegetables; milk, beef, mutton, eggs
Exports$298.4 billion (2012 est.)
$307.2 billion (2011 est.)
$24.63 billion (2012 est.)
$26.31 billion (2011 est.)
Exports - commoditiespetroleum products, precious stones, machinery, iron and steel, chemicals, vehicles, appareltextiles (garments, bed linen, cotton cloth, yarn), rice, leather goods, sports goods, chemicals, manufactures, carpets and rugs
Exports - partnersUS 12.7%, UAE 12.3%, China 5%, Singapore 5%, Hong Kong 4.1% (2012)US 13.3%, China 10.9%, UAE 8.6%, Afghanistan 8.5% (2012)
Imports$500.4 billion (2012 est.)
$475.3 billion (2011 est.)
$39.81 billion (2012 est.)
$38.85 billion (2011 est.)
Imports - commoditiescrude oil, precious stones, machinery, fertilizer, iron and steel, chemicalspetroleum, petroleum products, machinery, plastics, transportation equipment, edible oils, paper and paperboard, iron and steel, tea
Imports - partnersChina 11%, UAE 7.7%, Saudi Arabia 6.7%, Switzerland 5.9%, US 4.9% (2012)China 19.8%, Saudi Arabia 12%, UAE 11.9%, Kuwait 6.2% (2012)
Debt - external$376.3 billion (31 December 2012 est.)
$334.3 billion (31 December 2011 est.)
$56.19 billion (31 December 2012 est.)
$60.18 billion (31 December 2011 est.)
Exchange ratesIndian rupees (INR) per US dollar -
53.437 (2012 est.)
46.671 (2011 est.)
45.726 (2010 est.)
48.405 (2009)
43.319 (2008)
Pakistani rupees (PKR) per US dollar -
93.3952 (2012 est.)
86.3434 (2011 est.)
85.194 (2010 est.)
81.71 (2009)
70.64 (2008)
Fiscal year1 April - 31 March1 July - 30 June
Investment (gross fixed)29.9% of GDP (2012 est.)10.9% of GDP (2012 est.)
Public debt49.6% of GDP (2012 est.)
49.8% of GDP (2011 est.)
note: data cover central government debt, and exclude debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities; the data exclude debt issued by subnational entities, as well as intra-governmental debt; intra-governmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement, medical care, and unemployment; debt instruments for the social funds are not sold at public auctions
50.7% of GDP (2012 est.)
49.4% of GDP (2011 est.)
Reserves of foreign exchange and gold$297.8 billion (31 December 2012 est.)
$297.9 billion (31 December 2011 est.)
$13.8 billion (31 December 2012 est.)
$18.09 billion (31 December 2011 est.)
Current Account Balance-$80.15 billion (2012 est.)
-$46.91 billion (2011 est.)
-$4.632 billion (2012 est.)
$268 million (2011 est.)
GDP (official exchange rate)$1.825 trillion (2012 est.)$231.9 billion (2012 est.)
Stock of direct foreign investment - at home$229.2 billion (31 December 2012 est.)
$203.9 billion (31 December 2011 est.)
$22.72 billion (31 December 2012 est.)
$21.88 billion (31 December 2011 est.)
Stock of direct foreign investment - abroad$117.5 billion (31 December 2012 est.)
$108.8 billion (31 December 2011 est.)
$1.495 billion (31 December 2012 est.)
$1.432 billion (31 December 2011 est.)
Market value of publicly traded shares$1.015 trillion (31 December 2011)
$1.616 trillion (31 December 2010)
$1.179 trillion (31 December 2009)
$32.76 billion (31 December 2011)
$38.17 billion (31 December 2010)
$33.24 billion (31 December 2009)
Central bank discount rate5.5% (31 December 2010 est.)
6% (31 December 2009 est.)
note: the Indian central bank's policy rate - the repurchase rate - was 8% during December 2012
12% (31 January 2012 est.)
14% (31 December 2010 est.)
Commercial bank prime lending rate10.63% (31 December 2012 est.)
10.19% (31 December 2011 est.)
12.41% (31 December 2012 est.)
14.12% (31 December 2011 est.)
Stock of domestic credit$1.412 trillion (31 December 2012 est.)
$1.249 trillion (31 December 2011 est.)
$94.65 billion (31 December 2012 est.)
$86.76 billion (31 December 2011 est.)
Stock of narrow money$323 billion (31 December 2012 est.)
$305.7 billion (31 December 2011 est.)
$62.29 billion (31 December 2012 est.)
$56.34 billion (31 December 2011 est.)
Stock of broad money$1.451 trillion (31 December 2012 est.)
$1.293 trillion (31 December 2011 est.)
$76.16 billion (31 December 2011 est.)
$71.36 billion (31 December 2010 est.)
Taxes and other revenues9.3% of GDP (2012 est.)11.9% of GDP (2012 est.)
Budget surplus (+) or deficit (-)-5.4% of GDP (2012 est.)-6.3% of GDP (2012 est.)
Unemployment, youth ages 15-24total: 10.2%
male: 9.8%
female: 11.5% (2010)
total: 7.7%
male: 7%
female: 10.5% (2008)
GDP - composition, by end usehousehold consumption: 56.9%
government consumption: 11.8%
investment in fixed capital: 29.9%
investment in inventories: 8.4%
exports of goods and services: 24.3%
imports of goods and services: -31.3%
(2012 est.)
household consumption: 87.3%
government consumption: 8.3%
investment in fixed capital: 10.9%
investment in inventories: 1.6%
exports of goods and services: 12.5%
imports of goods and services: -20.6%
(2012 est.)
Gross national saving27.9% of GDP (2012 est.)
30.1% of GDP (2011 est.)
31.9% of GDP (2010 est.)
11.1% of GDP (2012 est.)
11.9% of GDP (2011 est.)
14.6% of GDP (2010 est.)

Source: CIA Factbook