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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 served to accelerate the country's growth, which averaged under 7% per year from 1997 to 2011. India'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 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. India's economic growth began slowing 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 the global situation. In late 2012, the Indian Government announced additional reforms and deficit reduction measures, including allowing higher levels of foreign participation in direct investment in the economy. 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, India has many 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, high spending and poorly-targeted subsidies, inadequate availability of quality basic and higher education, and accommodating rural-to-urban migration. Growth in 2013 fell to a decade low, as India's economic leaders struggled to improve the country's wide fiscal and current account deficits. 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. However, 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.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 was 6.6% in 2013, 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. 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 the following two years, 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 3.5% per year from 2008 to 2013. 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)$4.99 trillion (2013 est.)
$4.833 trillion (2012 est.)
$4.63 trillion (2011 est.)
note: data are in 2013 US dollars
$574.1 billion (2013 est.)
$554.2 billion (2012 est.)
$531 billion (2011 est.)
note: data are in 2013 US dollars
GDP - real growth rate3.2% (2013 est.)
5.1% (2012 est.)
7.5% (2011 est.)
3.6% (2013 est.)
4.4% (2012 est.)
3.7% (2011 est.)
GDP - per capita (PPP)$4,000 (2013 est.)
$3,900 (2012 est.)
$3,800 (2011 est.)
note: data are in 2013 US dollars
$3,100 (2013 est.)
$3,100 (2012 est.)
$3,000 (2011 est.)
note: data are in 2013 US dollars
GDP - composition by sectoragriculture: 17.4%
industry: 25.8%
services: 56.9% (2013 est.)
agriculture: 25.3%
industry: 21.6%
services: 53.1% (2013 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)9.6% (2013 est.)
9.7% (2012 est.)
7.7% (2013 est.)
9.7% (2012 est.)
Labor force487.3 million (2013 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: 49%
industry: 20%
services: 31% (2012 est.)
agriculture: 45.1%
industry: 20.7%
services: 34.2% (2010 est.)
Unemployment rate8.8% (2013 est.)
8.5% (2012 est.)
6.6% (2013 est.)
6% (2012 est.)
note: substantial underemployment exists
Distribution of family income - Gini index36.8 (2004)
37.8 (1997)
30.6 (FY07/08)
41 (FY98/99)
Budgetrevenues: $181.3 billion
expenditures: $281.6 billion (2013 est.)
revenues: $29.71 billion
expenditures: $47.97 billion (2013 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 rate0.9% (2013 est.)3.5% (2013 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$313.2 billion (2013 est.)
$296.8 billion (2012 est.)
$25.05 billion (2013 est.)
$24.71 billion (2012 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 - partnersUAE 12.3%, US 12.2%, China 5%, Singapore 4.9%, Hong Kong 4.1% (2012)US 13.6%, China 11.1%, UAE 8.5%, Afghanistan 7.8% (2012)
Imports$467.5 billion (2013 est.)
$488.9 billion (2012 est.)
$39.27 billion (2013 est.)
$40.07 billion (2012 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 10.7%, UAE 7.8%, Saudi Arabia 6.8%, Switzerland 6.2%, US 5.1% (2012)China 19.7%, Saudi Arabia 12.3%, UAE 12.1%, Kuwait 6.3% (2012)
Debt - external$412.2 billion (31 December 2013 est.)
$378.9 billion (31 December 2012 est.)
$52.43 billion (31 December 2013 est.)
$54.5 billion (31 December 2012 est.)
Exchange ratesIndian rupees (INR) per US dollar -
58.68 (2013 est.)
53.437 (2012 est.)
45.726 (2010 est.)
48.405 (2009)
43.319 (2008)
Pakistani rupees (PKR) per US dollar -
100.4 (2013 est.)
93.3952 (2012 est.)
85.194 (2010 est.)
81.71 (2009)
70.64 (2008)
Fiscal year1 April - 31 March1 July - 30 June
Public debt51.8% of GDP (2013 est.)
51.7% of GDP (2012 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
54.6% of GDP (2013 est.)
52.1% of GDP (2012 est.)
Reserves of foreign exchange and gold$295 billion (31 December 2013 est.)
$296 billion (28 December 2012 est.)
$11.18 billion (31 December 2013 est.)
$13.8 billion (31 December 2012 est.)
Current Account Balance-$74.79 billion (2013 est.)
-$91.47 billion (2012 est.)
-$2.36 billion (2013 est.)
-$2.072 billion (2012 est.)
GDP (official exchange rate)$1.67 trillion (2013 est.)$236.5 billion (2013 est.)
Stock of direct foreign investment - at home$310 billion (30 November 2013 est.)
$225.1 billion (31 December 2012 est.)
$24.33 billion (31 December 2013 est.)
$22.73 billion (31 December 2012 est.)
Stock of direct foreign investment - abroad$120.1 billion (31 December 2013 est.)
$118.1 billion (31 December 2012 est.)
$1.569 billion (31 December 2013 est.)
$1.519 billion (31 December 2012 est.)
Market value of publicly traded shares$1.263 trillion (31 December 2012 est.)
$1.015 trillion (31 December 2011)
$1.616 trillion (31 December 2010 est.)
$NA (31 December 2012 est.)
$NA (31 December 2011)
$38.17 billion (31 December 2010 est.)
Central bank discount rate7.75% (31 December 2013 est.)
8% (31 December 2010 est.)
note: this is the Indian central bank's policy rate - the repurchase rate
12% (31 January 2012 est.)
14% (31 December 2010 est.)
Commercial bank prime lending rate10.6% (31 December 2013 est.)
10.63% (31 December 2012 est.)
11.5% (31 December 2013 est.)
12.41% (31 December 2012 est.)
Stock of domestic credit$1.379 trillion (31 December 2013 est.)
$1.401 trillion (31 December 2012 est.)
$106.8 billion (31 December 2013 est.)
$94.65 billion (31 December 2012 est.)
Stock of narrow money$303.1 billion (31 December 2013 est.)
$317.4 billion (31 December 2012 est.)
$71.96 billion (31 December 2013 est.)
$62.29 billion (31 December 2012 est.)
Stock of broad money$1.376 trillion (31 December 2013 est.)
$1.396 trillion (31 December 2012 est.)
$93.11 billion (31 December 2013 est.)
$82.63 billion (31 December 2012 est.)
Taxes and other revenues10.3% of GDP (2013 est.)12.6% of GDP (2013 est.)
Budget surplus (+) or deficit (-)-5.7% of GDP (2013 est.)-7.7% of GDP (2013 est.)
Unemployment, youth ages 15-24total: 10.7%
male: 10.4%
female: 11.6% (2012)
total: 7.7%
male: 7%
female: 10.5% (2008)
GDP - composition, by end usehousehold consumption: 56.4%
government consumption: 12.4%
investment in fixed capital: 29.6%
investment in inventories: 8.2%
exports of goods and services: 25.2%
imports of goods and services: -31.8%
(2013 est.)
household consumption: 81%
government consumption: 10.8%
investment in fixed capital: 12.6%
investment in inventories: 1.6%
exports of goods and services: 12.7%
imports of goods and services: -18.8%
(2013 est.)
Gross national saving33.7% of GDP (2013 est.)
28.8% of GDP (2012 est.)
30.3% of GDP (2011 est.)
12.7% of GDP (2013 est.)
13.3% of GDP (2012 est.)
12.9% of GDP (2011 est.)

Source: CIA Factbook