Pakistan’s Economy

a SAGA of
BOOM and BUST

7th Annual Business Research Conference | April 2019

Shahzad Saleem
The Sub-Continent SAGA | Boom-Bust-Boom....... ..BOOM..
32%
Are we
included
28%
?
24%
23%

16%

12%

9%
7%
5%
4%

1 1000 1500 1700 1820 1870 1930 1947 1971 2019

 GDP per Capita (US$)
2,500

2,213

2,000

1,733
1,629
1,500

1,000

500

Source: World Bank PAKISTAN INDIA BANGLADESH

 Annual Real GDP Growth Rate

-2%
10%
12%

0%
2%
4%
6%
8%
FY51
FY52
FY53
FY54
FY55
FY56

Source: State Bank Of Pakistan

FY57
FY58
FY59
FY60
FY61
FY62
FY63
FY64
FY65
FY66
FY67
FY68
FY69
FY70
FY71
FY72
FY73
FY74
FY75
FY76
FY77
FY78

Annual Real GDP GR

FY79
FY80
FY81
FY82
FY83
FY84
FY85
FY86
FY87
FY88
FY89
Moving Average

FY90
FY91
FY92
FY93
FY94
FY95
FY96
FY97
Real GDP growth rate ‫ ׀‬PAKISTAN

FY98
FY99
FY00
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19e
0%
2%
4%
6%
8%

-2%
10%
12%

5-years Moving Average

 Parity against US$
139
140

130

120

110

100

90
82
80

70

60

50

40
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Pakistan India Bangladesh

 Interest Rate Environment
12%

11% 10.75%

10%

9%

8%

7%
6.25%
6%
6.00%

5%

4%
Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19

Source:: State Bank Of Pakistan and CEIC..com PAKISTAN BANGLADESH INDIA

 Here we STAND ………….

❑ less than 4% GDP growth

❑ double digit inflation (10%)
❑ also double digit interest rate regime (11%)
❑ depreciating rupee (already flirting with PKR 150 to a US$)
❑ single industry (textile) generating close to half of exports
❑ Debt to GDP of around 70%
❑ and ………..

❑ But a young population

 Inconsistency
is not going away anytime soon

Traditional
Businesses Export
Tax
Local cost
Compliance (earn $)
Survival
Kit
…. a YOUNG
population …..