Economy
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Pakistan is a rapidly developing country[49][50][51] and a major emerging market,[52] with an economic growth rate of 7 percent per annum for four consecutive years up to 2007.[53][54] Despite being a very poor country in 1947, Pakistan's economic growth rate was better than the global average during the subsequent four decades, but imprudent policies led to a slowdown in the late 1990s.[55] Recently, wide-ranging economic reforms have resulted in a stronger economic outlook and accelerated growth especially in the manufacturing and financial services sectors. There has been great improvement in the foreign exchange position and rapid growth in hard currency reserves in recent years. The 2005 estimate of foreign debt was close to US$40 billion. However, this has decreased in recent years with assistance from the International Monetary Fund (IMF) and significant debt-relief from the United States. Pakistan's gross domestic product, as measured by purchasing power parity (PPP), is estimated to be US$475.4 billion[56] while its per capita income (PCI) stands at $2,942.[56] The poverty rate in Pakistan is estimated to be between 23%[57] and 28%.[58] Pakistan's GDP growth rates have seen a steady increase over the last 5 years. However, inflationary pressures and a low savings rate, among other economic factors, could make it difficult to sustain a high growth rate.[59][60][61]
The structure of the Pakistani economy has changed from a mainly agricultural base to a strong service base. Agriculture now only accounts for roughly 20% of the GDP, while the service sector accounts for 53% of the GDP with wholesale and retail trade forming 30% of this sector. In the past few years, the Karachi Stock Exchange has increased in value along with most of the world's emerging markets. Significant foreign investments have been made in several areas including telecommunications, real estate and energy.[62][63] Other major industries include software, automotives, textiles, cement, fertilizer, steel, ship building, aerospace and arms manufacturing.
In November, 2006, China and Pakistan signed a free trade agreement to achieve the tripling of bilateral trade from $4.2 billion (USD) to $15 billion (USD) within the next five years.[64] Pakistan's exports in 2007 amounted to $20.58 billion (USD).[65] The Economic crisis of 2008 led Pakistan to seek more than $100 billion in aid in order to stave off possible bankruptcy, which could result in a severe blow on the global fight against terrorism.[66][67][68]
In Pakistan's economy, tourism has the potential to play a vital role, due to the majestic landscape of Pakistan and the variation of cultures within the nation. However, due to a lack of proper infrastructure in certain areas, and a worsening security situation in others, Pakistan still faces major setbacks. Otherwise, according to some international companies, Pakistan's tourism industry has the potential to reach some $10 billion annually.[citation needed]
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