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Afghanistan vs. Pakistan

Economy

AfghanistanPakistan
Economy - overview

Despite improvements in life expectancy, incomes, and literacy since 2001, Afghanistan is extremely poor, landlocked, and highly dependent on foreign aid. Much of the population continues to suffer from shortages of housing, clean water, electricity, medical care, and jobs. Corruption, insecurity, weak governance, lack of infrastructure, and the Afghan Government's difficulty in extending rule of law to all parts of the country pose challenges to future economic growth. Afghanistan's living standards are among the lowest in the world. Since 2014, the economy has slowed, in large part because of the withdrawal of nearly 100,000 foreign troops that had artificially inflated the country’s economic growth.

The international community remains committed to Afghanistan's development, pledging over $83 billion at ten donors' conferences between 2003 and 2016. In October 2016, the donors at the Brussels conference pledged an additional $3.8 billion in development aid annually from 2017 to 2020. Even with this help, Government of Afghanistan still faces number of challenges, including low revenue collection, anemic job creation, high levels of corruption, weak government capacity, and poor public infrastructure.

In 2017 Afghanistan's growth rate was only marginally above that of the 2014-2016 average. The drawdown of international security forces that started in 2012 has negatively affected economic growth, as a substantial portion of commerce, especially in the services sector, has catered to the ongoing international troop presence in the country. Afghan President Ashraf GHANI Ahmadzai is dedicated to instituting economic reforms to include improving revenue collection and fighting corruption. The government has implemented reforms to the budget process and in some other areas. However, many other reforms will take time to implement and Afghanistan will remain dependent on international donor support over the next several years.

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)
$69.45 billion (2017 est.)
$67.65 billion (2016 est.)
$66.21 billion (2015 est.)

note: data are in 2017 dollars

$1.061 trillion (2017 est.)
$1.007 trillion (2016 est.)
$962.8 billion (2015 est.)
note: data are in 2017 dollars
data are for fiscal years
GDP - real growth rate
2.7% (2017 est.)
2.2% (2016 est.)
1% (2015 est.)
5.4% (2017 est.)
4.6% (2016 est.)
4.1% (2015 est.)

note: data are for fiscal years

GDP - per capita (PPP)
$2,000 (2017 est.)
$2,000 (2016 est.)
$2,000 (2015 est.)

note: data are in 2017 dollars

$5,400 (2017 est.)
$5,200 (2016 est.)
$5,100 (2015 est.)
note: data are in 2017 dollars
data are for fiscal years
GDP - composition by sector
agriculture: 23% (2016 est.)
industry: 21.1% (2016 est.)
services: 55.9% (2016 est.)

note: data exclude opium production

agriculture: 24.4% (2016 est.)
industry: 19.1% (2016 est.)
services: 56.5% (2017 est.)
Population below poverty line
54.5% (2017 est.)
29.5% (FY2013 est.)
Household income or consumption by percentage share
lowest 10%: 3.8%
highest 10%: 24% (2008)
lowest 10%: 4%
highest 10%: 26.1% (FY2013)
Inflation rate (consumer prices)
5% (2017 est.)
4.4% (2016 est.)
4.1% (2017 est.)
2.9% (2016 est.)
Labor force
8.478 million (2017 est.)
61.71 million (2017 est.)

note: extensive export of labor, mostly to the Middle East, and use of child labor

Labor force - by occupation
agriculture: 44.3%
industry: 18.1%
services: 37.6% (2017 est.)
agriculture: 42.3%
industry: 22.6%
services: 35.1% (FY2015 est.)
Unemployment rate
23.9% (2017 est.)
22.6% (2016 est.)
6% (2017 est.)
6% (2016 est.)

note: Pakistan has substantial underemployment

Distribution of family income - Gini index
29.4 (2008)
30.7 (FY2013)
30.9 (FY2011)
Budget
revenues: 2.276 billion (2017 est.)
expenditures: 5.328 billion (2017 est.)
revenues: 46.81 billion (2017 est.)
expenditures: 64.49 billion (2017 est.)

note: data are for fiscal years

Industries
small-scale production of bricks, textiles, soap, furniture, shoes, fertilizer, apparel, food products, non-alcoholic beverages, mineral water, cement; handwoven carpets; natural gas, coal, copper
textiles and apparel, food processing, pharmaceuticals, surgical instruments, construction materials, paper products, fertilizer, shrimp
Industrial production growth rate
-1.9% (2016 est.)
5.4% (2017 est.)
Agriculture - products
opium, wheat, fruits, nuts, wool, mutton, sheepskins, lambskins, poppies
cotton, wheat, rice, sugarcane, fruits, vegetables; milk, beef, mutton, eggs
Exports
$784 million (2017 est.)
$614.2 million (2016 est.)

note: not including illicit exports or reexports

$32.88 billion (2017 est.)
$21.97 billion (2016 est.)
Exports - commodities
opium, fruits and nuts, handwoven carpets, wool, cotton, hides and pelts, precious and semi-precious gems, and medical herbs
textiles (garments, bed linen, cotton cloth, yarn), rice, leather goods, sporting goods, chemicals, manufactures, surgical instruments, carpets and rugs
Exports - partners
India 56.5%, Pakistan 29.6% (2017)
US 17.7%, UK 7.7%, China 6%, Germany 5.8%, Afghanistan 5.2%, UAE 4.5%, Spain 4.1% (2017)
Imports
$7.616 billion (2017 est.)
$6.16 billion (2016 est.)
$53.11 billion (2017 est.)
$42.69 billion (2016 est.)
Imports - commodities
machinery and other capital goods, food, textiles, petroleum products
petroleum, petroleum products, machinery, plastics, transportation equipment, edible oils, paper and paperboard, iron and steel, tea
Imports - partners
China 21%, Iran 20.5%, Pakistan 11.8%, Kazakhstan 11%, Uzbekistan 6.8%, Malaysia 5.3% (2017)
China 27.4%, UAE 13.7%, US 4.9%, Indonesia 4.3%, Saudi Arabia 4.2% (2017)
Debt - external
$284 million (FY10/11)
$82.19 billion (31 December 2017 est.)
$70.45 billion (31 December 2016 est.)
Exchange rates
afghanis (AFA) per US dollar -
7.87 (2017 est.)
68.03 (2016 est.)
67.87 (2015)
61.14 (2014 est.)
57.25 (2013 est.)
Pakistani rupees (PKR) per US dollar -
105.1 (2017 est.)
104.769 (2016 est.)
104.769 (2015 est.)
102.769 (2014 est.)
101.1 (2013 est.)
Fiscal year
21 December - 20 December
1 July - 30 June
Public debt
7% of GDP (2017 est.)
7.8% of GDP (2016 est.)
67% of GDP (2017 est.)
67.6% of GDP (2016 est.)
Reserves of foreign exchange and gold
$7.187 billion (31 December 2017 est.)
$6.901 billion (31 December 2015 est.)
$18.46 billion (31 December 2017 est.)
$22.05 billion (31 December 2016 est.)
Current Account Balance
$1.014 billion (2017 est.)
$1.409 billion (2016 est.)
-$7.143 billion (2019 est.)
-$19.482 billion (2018 est.)
GDP (official exchange rate)
$20.24 billion (2017 est.)
$305 billion (2017 est.)
Market value of publicly traded shares

NA

$43.68 billion (31 December 2012 est.)
$32.76 billion (31 December 2011 est.)
$38.17 billion (31 December 2010 est.)
Commercial bank prime lending rate
15% (31 December 2016 est.)
15% (31 December 2015 est.)
6.98% (31 December 2017 est.)
6.94% (31 December 2016 est.)
Stock of domestic credit
-$240.6 million (31 December 2016 est.)
$155.9 billion (31 December 2017 est.)
$145.2 billion (31 December 2016 est.)
Stock of narrow money
$6.644 billion (31 December 2014 est.)
$6.192 billion (31 December 2013 est.)
$109.9 billion (31 December 2017 est.)
$103.5 billion (31 December 2016 est.)
Stock of broad money
$6.945 billion (31 December 2014 est.)
$6.544 billion (31 December 2013 est.)
$109.9 billion (31 December 2017 est.)
$103.5 billion (31 December 2016 est.)
Taxes and other revenues
11.2% (of GDP) (2017 est.)
15.4% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)
-15.1% (of GDP) (2017 est.)
-5.8% (of GDP) (2017 est.)
Unemployment, youth ages 15-24
total: 17.6%
male: 16.3%
female: 21.4% (2017)
total: 7.8%
male: 8.2%
female: 6.8% (2018 est.)
GDP - composition, by end use
household consumption: 81.6% (2016 est.)
government consumption: 12% (2016 est.)
investment in fixed capital: 17.2% (2016 est.)
investment in inventories: 30% (2016 est.)
exports of goods and services: 6.7% (2016 est.)
imports of goods and services: -47.6% (2016 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 saving
22.7% of GDP (2017 est.)
25.8% of GDP (2016 est.)
21.4% of GDP (2015 est.)
12% of GDP (2017 est.)
13.9% of GDP (2016 est.)
14.7% of GDP (2015 est.)

note: data are for fiscal years

Source: CIA Factbook