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India vs. Pakistan

Economy

IndiaPakistan
Economy - overviewIndia's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly less 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 but employing 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.

India 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 served to accelerate the country's growth, which averaged nearly 7% per year from 1997 to 2016. India's economic growth slowed in 2011 because of a decline in investment caused by high interest rates, rising inflation, and investor pessimism about the government's commitment to further economic reforms and about slow world growth. Rising macroeconomic imbalances in India and improving economic conditions in Western countries led investors to shift capital away from India, prompting a sharp depreciation of the rupee.

Growth rebounded in 2014 through 2016, exceeding 7% each year. Investors’ perceptions of India improved in early 2014, due to a reduction of the current account deficit and expectations of post-election economic reform, resulting in a surge of inbound capital flows and stabilization of the rupee. Since the election, the government has passed an important goods and services tax bill and raised foreign direct investment caps in some sectors but most economic reforms have focused on administrative and governance changes largely because the ruling party remains a minority in India’s upper house of Parliament, which must approve most bills. Despite a high growth rate compared to the rest of the world, in 2015 and 2016, India’s government-owned banks faced mounting bad debt, resulting in low credit growth and restrained economic growth.

The outlook for India's long-term growth is moderately positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. However, long-term challenges remain significant, including: India's 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, high spending and poorly targeted subsidies, 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. Pakistan has a large English-speaking population. Nevertheless, a challenging security environment, electricity shortages, and a burdensome investment climate have deterred investors. Agriculture accounts for one-fifth of output and two-fifths of employment. Textiles and apparel account for most of Pakistan's export earnings, and Pakistan's failure to diversify its exports has left the country vulnerable to shifts in world demand. Pakistan’s GDP growth has gradually increased since 2012. Official unemployment was 6.1% in 2016, but this fails to capture the true picture, because much of the economy is informal and underemployment remains high. Human development continues to lag behind most of the region.

In 2013, Pakistan embarked on a $6.3 billion IMF Extended Fund Facility, which focused on reducing energy shortages, stabilizing public finances, increasing revenue collection, and improving its balance of payments position. The program concluded in September 2016. Although Pakistan missed several structural reform criteria, it restored macroeconomic stability, improved its credit rating, and boosted growth. The Pakistani rupee, after heavy depreciation in 2013, remained relatively stable against the US dollar in 2016. Low global oil prices in 2016 contributed to a narrowing current account deficit and lower inflation. Remittances from overseas workers continued to be a key revenue source, also mitigating the impact of the lack of foreign investment and a growing trade deficit on the country’s current account.

Pakistan must continue to address several long-standing issues, including expanding investment in education and healthcare, adapting to the effects of climate change and natural disasters, improving the country’s business environment, reducing dependence on foreign donors, and widening the country’s tax base. Given demographic challenges, Pakistan’s leadership will be pressed to implement economic reforms, promote further development of the energy sector, and attract foreign investment to support sufficient economic growth necessary to employ its growing and rapidly urbanizing population, much of which is under the age of 25.

In an effort to boost development, Pakistan and China are implementing the “China-Pakistan Economic Corridor”, a $46 billion investment program targeted towards the energy sector and other infrastructure projects that Islamabad and Beijing had agreed on in early 2013.
GDP (purchasing power parity)$8.721 trillion (2016 est.)
$8.103 trillion (2015 est.)
$7.534 trillion (2014 est.)
note: data are in 2016 dollars
$988.2 billion (2016 est.)
$943.9 billion (2015 est.)
$905.8 billion (2014 est.)
note: data are in 2016 dollars
data are for fiscal years
GDP - real growth rate7.6% (2016 est.)
7.6% (2015 est.)
7.2% (2014 est.)
4.7% (2016 est.)
4.2% (2015 est.)
4.1% (2014 est.)
note: data are for fiscal years
GDP - per capita (PPP)$6,700 (2016 est.)
$6,300 (2015 est.)
$5,900 (2014 est.)
note: data are in 2016 dollars
$5,100 (2016 est.)
$4,900 (2015 est.)
$4,800 (2014 est.)
note: data are in 2016 dollars
data are for fiscal years
GDP - composition by sectoragriculture: 16.5%
industry: 29.8%
services: 45.4% (2016 est.)
agriculture: 25.2%
industry: 19.2%
services: 55.6% (2016 est.)
Population below poverty line21.9% (2011 est.)
29.5% (FY2013 est.)
Household income or consumption by percentage sharelowest 10%: 3.6%
highest 10%: 29.8% (2011)
lowest 10%: 4%
highest 10%: 26.1% (FY2013)
Inflation rate (consumer prices)5.2% (2016 est.)
4.9% (2015 est.)
2.9% (FY2016 est.)
4.5% (FY2015 est.)
Labor force513.7 million (2016 est.)
65.1 million
note: extensive export of labor, mostly to the Middle East, and use of child labor (2016 est.)
Labor force - by occupationagriculture: 47%
industry: 22%
services: 31% (FY 2014 est.)
agriculture: 42.3%
industry: 22.6%
services: 35.1% (FY2015 est.)
Unemployment rate5% (FY 2016 est.)
4.9% (FY 2014 est.)
6.1% (2016 est.)
6.5% (2015 est.)
note: substantial underemployment exists
Distribution of family income - Gini index35.2 (2011)
37.8 (1997)
30.7 (FY2013)
30.9 (FY2011)
Budgetrevenues: $273.3 billion
expenditures: $273.3 billion (FY 2016 est.)
revenues: $42.3 billion
expenditures: $54.63 billion
note: data are for fiscal years (2016 est.)
Industriestextiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software, pharmaceuticals
textiles and apparel, food processing, pharmaceuticals, construction materials, paper products, fertilizer, shrimp
Industrial production growth rate7.4% (2016 est.)
6.8% (2016 est.)
Agriculture - productsrice, wheat, oilseed, cotton, jute, tea, sugarcane, lentils, onions, potatoes; dairy products, sheep, goats, poultry; fish
cotton, wheat, rice, sugarcane, fruits, vegetables; milk, beef, mutton, eggs
Exports$262.3 billion (FY 2016 est.)
$267.9 billion (2015 est.)
$20.96 billion (2016 est.)
$28.51 billion (2015 est.)
Exports - commoditiespetroleum products, precious stones, vehicles, machinery, iron and steel, chemicals, pharmaceutical products, cereals, apparel
textiles (garments, bed linen, cotton cloth, yarn), rice, leather goods, sporting goods, chemicals, manufactures, carpets and rugs
Exports - partnersUS 15.2%, UAE 11.4%, Hong Kong 4.6% (1 January - 30 September 2016)
US 13%, UAE 9%, Afghanistan 9%, China 8.7%, UK 5.3%, Germany 4.9% (2015)
Imports$381 billion (FY2016 est.)
$394.1 billion (2015 est.)
$38.25 billion (2016 est.)
$47.53 billion (2015 est.)
Imports - commoditiescrude oil, precious stones, machinery, chemicals, fertilizer, plastics, iron and steel
petroleum, petroleum products, machinery, plastics, transportation equipment, edible oils, paper and paperboard, iron and steel, tea
Imports - partnersChina 15.7%, Saudi Arabia 5.4%, Switzerland 5.4%, US 5.3%, UAE 5.2% (1 January - 30 September 2016)
China 28.3%, Saudi Arabia 11%, UAE 10.9%, Kuwait 5.7% (2015)
Debt - external$507 billion (31 December 2016 est.)
$480.8 billion (31 December 2015 est.)
$64.04 billion (31 December 2016 est.)
$62.18 billion (31 December 2015 est.)
Exchange ratesIndian rupees (INR) per US dollar -
68.3 (2016 est.)
64.152 (2015 est.)
64.152 (2014 est.)
61.03 (2013 est.)
53.44 (2012 est.)
Pakistani rupees (PKR) per US dollar -
103.768 (2016 est.)
101.89 (2015 est.)
102.769 (FY2014 est.)
101.1 (FY2013 est.)
93.4 (2012 est.)
Fiscal year1 April - 31 March
1 July - 30 June
Public debt52.3% of GDP (2016 est.)
52.4% of GDP (2015 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
69.8% of GDP (30 September 2016 est.)
69.9% of GDP (30 September 2015 est.)
Reserves of foreign exchange and gold$359.1 billion (31 December 2016 est.)
$351.6 billion (31 December 2015 est.)
$20.53 billion (31 December 2016 est.)
$20.05 billion (31 December 2015 est.)
Current Account Balance-$20.86 billion (2016 est.)
-$22.09 billion (2015 est.)
-$3.262 billion (2016 est.)
-$2.709 billion (2015 est.)
GDP (official exchange rate)$2.251 trillion (2016 est.)
$298.1 billion (2015 est.)
Stock of direct foreign investment - at home$453.2 billion (30 September 2016 est.)
$296.8 billion (31 December 2015 est.)
$33.82 billion (31 December 2016 est.)
$31.82 billion (31 December 2015 est.)
Stock of direct foreign investment - abroad$149 billion (31 December 2016 est.)
$139 billion (31 December 2015 est.)
$2.059 billion (31 December 2016 est.)
$2.009 billion (31 December 2015 est.)
Market value of publicly traded shares$1.516 trillion (31 December 2015 est.)
$1.558 trillion (31 December 2014 est.)
$1.139 trillion (31 December 2013 est.)
$43.68 billion (31 December 2012 est.)
$32.76 billion (31 December 2011 est.)
$38.17 billion (31 December 2010 est.)
Central bank discount rate6.25% (31 December 2016)
7.75% (31 December 2014)
note: this is the Indian central bank's policy rate - the repurchase rate
5.75% (15 November 2016)
6% (15 November 2015)
Commercial bank prime lending rate9.3% (31 December 2016 est.)
10.01% (31 December 2015 est.)
6.46% (10 December 2015 est.)
9.74% (10 December 2014 est.)
Stock of domestic credit$1.579 trillion (31 December 2016 est.)
$1.57 trillion (31 December 2015 est.)
$142.2 billion (31 December 2016 est.)
$127.5 billion (31 December 2015 est.)
Stock of narrow money$385.9 billion (31 December 2016 est.)
$370.5 billion (31 December 2015 est.)
$100.2 billion (31 December 2016 est.)
$89.3 billion (31 December 2015 est.)
Stock of broad money$1.728 trillion (31 December 2016 est.)
$1.704 trillion (31 December 2015 est.)
$122.3 billion (31 December 2016 est.)
$109.8 billion (31 December 2015 est.)
Taxes and other revenues12.1% of GDP (FY 2016 est.)
14.2% of GDP (2016 est.)
Budget surplus (+) or deficit (-)0% of GDP (FY 2016 est.)
-4.1% of GDP (2016 est.)
Unemployment, youth ages 15-24total: 10.7%
male: 10.4%
female: 11.6% (2012 est.)
total: 10.4%
male: 9.4%
female: 12.9% (2014 est.)
GDP - composition, by end usehousehold consumption: 60.8%
government consumption: 11.4%
investment in fixed capital: 27.6%
investment in inventories: 3%
exports of goods and services: 19%
imports of goods and services: -21.8% (2016 est.)
household consumption: 80.1%
government consumption: 11.8%
investment in fixed capital: 13.6%
investment in inventories: 1.6%
exports of goods and services: 8.7%
imports of goods and services: -15.8% (2016 est.)
Gross national saving30.2% of GDP (2016 est.)
31.3% of GDP (2015 est.)
32.8% of GDP (2014 est.)
14.3% of GDP (2016 est.)
14.5% of GDP (2015 est.)
13.4% of GDP (2014 est.)
note: data are for fiscal years

Source: CIA Factbook