2014 Trade and Investment Profile
Pakistan has important strategic endowments and development potential. The country is located at the crossroads of South Asia, Central Asia, China and the Middle East and is thus at the fulcrum of a regional market with a vast population, large and diverse resources, and untapped potential for trade. The increasing proportion of Pakistan’s working-age population provides the country with a potential demographic dividend but also with the critical challenge to provide adequate services and increase employment.
Pakistan faces significant economic, governance and security challenges to achieve durable development outcomes. The persistence of conflict in the border areas and security challenges throughout the country is a reality that affects all aspects of life in Pakistan and impedes development. A range of governance and business environment indicators suggest that deep improvements in governance are needed to unleash Pakistan’s growth potential.
Helped by cheap international oil prices and steady implementation of its reforms program, the economy has showed resilience. Despite political uncertainty in 2014 and the September 2014 floods in Punjab that affected agricultural crops, macroeconomic indicators have improved during 2015.
Pakistan’s economic growth is showing signs of sustained recovery despite persistent energy constraints. Growth is attributed to performance in agriculture (cotton, wheat and rice) and services, boosted by road transportation, the telecom industry, finance and insurance.
Growth of large-scale manufacturing was positive but below last year and arising from strong performance of pharmaceuticals, electronics, automobiles, iron and steel. Nevertheless energy constraints and weak external demand continue to pose challenge for this sector.
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