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Iran vs. Pakistan

Economy

IranPakistan
Economy - overview

Iran's economy is marked by statist policies, inefficiencies, and reliance on oil and gas exports, but Iran also possesses significant agricultural, industrial, and service sectors. The Iranian government directly owns and operates hundreds of state-owned enterprises and indirectly controls many companies affiliated with the country's security forces. Distortions - including corruption, price controls, subsidies, and a banking system holding billions of dollars of non-performing loans - weigh down the economy, undermining the potential for private-sector-led growth.

Private sector activity includes small-scale workshops, farming, some manufacturing, and services, in addition to medium-scale construction, cement production, mining, and metalworking. Significant informal market activity flourishes and corruption is widespread.

The lifting of most nuclear-related sanctions under the Joint Comprehensive Plan of Action (JCPOA) in January 2016 sparked a restoration of Iran's oil production and revenue that drove rapid GDP growth, but economic growth declined in 2017 as oil production plateaued. The economy continues to suffer from low levels of investment and declines in productivity since before the JCPOA, and from high levels of unemployment, especially among women and college-educated Iranian youth.

In May 2017, the re-election of President Hasan RUHANI generated widespread public expectations that the economic benefits of the JCPOA would expand and reach all levels of society. RUHANI will need to implement structural reforms that strengthen the banking sector and improve Iran's business climate to attract foreign investment and encourage the growth of the private sector. Sanctions that are not related to Iran's nuclear program remain in effect, and these-plus fears over the possible re-imposition of nuclear-related sanctions-will continue to deter foreign investors from engaging with Iran.

Decades of internal political disputes and low levels of foreign investment have led to underdevelopment in Pakistan. Pakistan has a large English-speaking population, with English-language skills less prevalent outside urban centers. Despite some progress in recent years in both security and energy, a challenging security environment, electricity shortages, and a burdensome investment climate have traditionally deterred investors. Agriculture accounts for one-fifth of output and two-fifths of employment. Textiles and apparel account for more than half of Pakistan's export earnings; 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, and was 5.3% in 2017. Official unemployment was 6% in 2017, 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 has remained relatively stable against the US dollar since 2015, though it declined about 10% between November 2017 and March 2018. Balance of payments concerns have reemerged, however, as a result of a significant increase in imports and weak export and remittance growth.

Pakistan must continue to address several longstanding issues, including expanding investment in education, healthcare, and sanitation; adapting to the effects of climate change and natural disasters; improving the country's business environment; 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" (CPEC) with $60 billion in investments targeted towards energy and other infrastructure projects. Pakistan believes CPEC investments will enable growth rates of over 6% of GDP by laying the groundwork for increased exports. CPEC-related obligations, however, have raised IMF concern about Pakistan's capital outflows and external financing needs over the medium term.

GDP (purchasing power parity)$1,027,238,000,000 (2019 est.)

$1.102 trillion (2018 est.)

$1,172,665,000,000 (2017 est.)

note: data are in 2017 dollars
$1,015,796,000,000 (2019 est.)

$1,005,850,000,000 (2018 est.)

$950.381 billion (2017 est.)

note: data are in 2017 dollars
data are for fiscal years
GDP - real growth rate3.7% (2017 est.)

12.5% (2016 est.)

-1.6% (2015 est.)
5.4% (2017 est.)

4.6% (2016 est.)

4.1% (2015 est.)

note: data are for fiscal years
GDP - per capita (PPP)$12,389 (2019 est.)

$13,472 (2018 est.)

$14,536 (2017 est.)

note: data are in 2017 dollars
$4,690 (2019 est.)

$4,740 (2018 est.)

$4,571 (2017 est.)

note: data are in 2010 dollars
GDP - composition by sectoragriculture: 9.6% (2016 est.)

industry: 35.3% (2016 est.)

services: 55% (2017 est.)
agriculture: 24.4% (2016 est.)

industry: 19.1% (2016 est.)

services: 56.5% (2017 est.)
Population below poverty line18.7% (2007 est.)24.3% (2015 est.)
Household income or consumption by percentage sharelowest 10%: 2.6%

highest 10%: 29.6% (2005)
lowest 10%: 4%

highest 10%: 26.1% (FY2013)
Inflation rate (consumer prices)10% (2017 est.)

9.6% (2017 est.)

9.1% (2016 est.)

note: official Iranian estimate
9.3% (2019 est.)

5.2% (2018 est.)

4.2% (2017 est.)
Labor force30.5 million (2017 est.)

note: shortage of skilled labor
61.71 million (2017 est.)

note: extensive export of labor, mostly to the Middle East, and use of child labor
Labor force - by occupationagriculture: 16.3%

industry: 35.1%

services: 48.6% (2013 est.)
agriculture: 42.3%

industry: 22.6%

services: 35.1% (FY2015 est.)
Unemployment rate11.8% (2017 est.)

12.4% (2016 est.)

note: data are Iranian Government numbers
6% (2017 est.)

6% (2016 est.)

note: Pakistan has substantial underemployment
Distribution of family income - Gini index40.8 (2017 est.)33.5 (2015 est.)

30.9 (FY2011)
Budgetrevenues: 74.4 billion (2017 est.)

expenditures: 84.45 billion (2017 est.)
revenues: 46.81 billion (2017 est.)

expenditures: 64.49 billion (2017 est.)

note: data are for fiscal years
Industriespetroleum, petrochemicals, gas, fertilizer, caustic soda, textiles, cement and other construction materials, food processing (particularly sugar refining and vegetable oil production), ferrous and nonferrous metal fabrication, armamentstextiles and apparel, food processing, pharmaceuticals, surgical instruments, construction materials, paper products, fertilizer, shrimp
Industrial production growth rate3% (2017 est.)5.4% (2017 est.)
Agriculture - productswheat, sugar cane, milk, sugar beet, tomatoes, barley, potatoes, oranges, poultry, applessugar cane, buffalo milk, wheat, milk, rice, maize, potatoes, cotton, fruit, mangoes/guavas
Exports$101.4 billion (2017 est.)

$83.98 billion (2016 est.)
$31.517 billion (2019 est.)

$27.604 billion (2018 est.)

$25.613 billion (2017 est.)
Exports - commoditiescrude petroleum, polymers, industrial alcohols, iron, pistachios (2019)textiles, clothing and apparel, rice, leather goods, surgical instruments (2019)
Exports - partnersChina 48%, India 12%, South Korea 8%, Turkey 6%, United Arab Emirates 5% (2019)United States 14%, China 8%, Germany 7%, United Kingdom 6% (2019)
Imports$76.39 billion (2017 est.)

$63.14 billion (2016 est.)
$42.27 billion (2019 est.)

$51.602 billion (2018 est.)

$47.165 billion (2017 est.)
Imports - commoditiesrice, corn, broadcasting equipment, soybean products, beef (2019)refined petroleum, crude petroleum, natural gas, palm oil, scrap iron (2019)
Imports - partnersChina 28%, United Arab Emirates 20%, India 11%, Turkey 7%, Brazil 6%, Germany 5% (2019)China 28%, United Arab Emirates 11%, United States 5% (2019)
Debt - external$7.995 billion (31 December 2017 est.)

$8.196 billion (31 December 2016 est.)
$107.527 billion (2019 est.)

$95.671 billion (2018 est.)
Exchange ratesIranian rials (IRR) per US dollar -

32,769.7 (2017 est.)

30,914.9 (2016 est.)

30,914.9 (2015 est.)

29,011.5 (2014 est.)

25,912 (2013 est.)
Pakistani rupees (PKR) per US dollar -

160.425 (2020 est.)

155.04 (2019 est.)

138.8 (2018 est.)

102.769 (2014 est.)

101.1 (2013 est.)
Fiscal year21 March - 20 March1 July - 30 June
Public debt39.5% of GDP (2017 est.)

47.5% of GDP (2016 est.)

note: includes publicly guaranteed debt
67% of GDP (2017 est.)

67.6% of GDP (2016 est.)
Reserves of foreign exchange and gold$120.6 billion (31 December 2017 est.)

$133.7 billion (31 December 2016 est.)
$18.46 billion (31 December 2017 est.)

$22.05 billion (31 December 2016 est.)
Current Account Balance$9.491 billion (2017 est.)

$16.28 billion (2016 est.)
-$7.143 billion (2019 est.)

-$19.482 billion (2018 est.)
GDP (official exchange rate)$581.252 billion (2019 est.)$253.183 billion (2019 est.)
Ease of Doing Business Index scoresOverall score: 58.5 (2020)

Starting a Business score: 67.8 (2020)

Trading score: 66.2 (2020)

Enforcement score: 58.2 (2020)
Overall score: 61 (2020)

Starting a Business score: 89.3 (2020)

Trading score: 68.8 (2020)

Enforcement score: 43.5 (2020)
Taxes and other revenues17.3% (of GDP) (2017 est.)15.4% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)-2.3% (of GDP) (2017 est.)-5.8% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 27.7%

male: 24.4%

female: 40% (2018 est.)
total: 7.8%

male: 8.2%

female: 6.8% (2018 est.)
GDP - composition, by end usehousehold consumption: 49.7% (2017 est.)

government consumption: 14% (2017 est.)

investment in fixed capital: 20.6% (2017 est.)

investment in inventories: 14.5% (2017 est.)

exports of goods and services: 26% (2017 est.)

imports of goods and services: -24.9% (2017 est.)
household consumption: 82% (2017 est.)

government consumption: 11.3% (2017 est.)

investment in fixed capital: 14.5% (2017 est.)

investment in inventories: 1.6% (2017 est.)

exports of goods and services: 8.2% (2017 est.)

imports of goods and services: -17.6% (2017 est.)
Gross national saving37.9% of GDP (2017 est.)

37.6% of GDP (2016 est.)

35.2% of GDP (2015 est.)
12.3% of GDP (2019 est.)

12.2% of GDP (2018 est.)

13% of GDP (2017 est.)

note: data are for fiscal years

Source: CIA Factbook