This presentation covers macroeconomic topics including GDP, inflation, unemployment, and monetary policy in Pakistan. It provides historical data and future projections on GDP, inflation rates in Pakistan compared to worldwide rates, unemployment rates in Pakistan versus India. It also explains key macroeconomic concepts such as consumer price index, unemployment formula and types, and fiscal and monetary policies in Pakistan, including the roles and tools of the State Bank of Pakistan in implementing monetary policy.

1. Presentation on
Macroeconomics:

2. Topics To be Covered:
• Gross Domestic Product (GDP).
• Inflation.
 Consumer Price Index (CPI).
• Unemployment Figures.
 Unemploymentrate Formula
 Types and Causes of unemployment.
• Monetary Policy.
 Fiscal Policy Structure in Pakistan.
 Monetary Policy Structure in Pakistan.

3. Gross Domestic Product (GDP):
• In 2002, GDP of Pakistan started
increasing from $79.99 billion to
$314.56 billion in 2018.
• From 2018 onwards it started to
decline from $314.56 billion to
$263.69 billion and will continue
to decline in future.
• Minimum GDP was recorded in
1985 which was 40.55 Billion
(USD).
• Maximum GDP was recorded in
2018 which was 314.57 Billion
(USD).
• The expected GDP in 2025 is to be
261.70 Billion (USD).

4. GDP of Pakistan V/S India

5. Inflation Rate of Pakistan: • Inflation started to rise and fall
between to 2007, from 2007 to
2009 it peaked instantly with the
highest rate of 19.56%.
• From 2009 onwards it gradually
started to decline and again
started to rise in 2018.
• Minimum inflation was recorded
in 2016 which is 2.86%.
• Maximum inflation was recorded
in 2009 which is 19.56%.
• The expected inflation in 2025 is
to be 5.6%.

6. Inflation Rate of the World:
• Inflation of the World in 2009 is
2.9%.
• Maximum Inflation of the world
was 12.5 in 1981.
• Minimum Inflation of the world
was 1.4% in 2015.
Source: Inflation, consumer prices (annual %) | Data (worldbank.org)

7. What is Consumer Price Index
(CPI)?
• Price index that measures the cost of a particular “basket”
or group of goods.
• Compares the value of the basket in one time period to a
particular base year.
• Measures price increases or “inflation”.
• Inflation is an increase in the overall average of prices in
the economy.

8. Consumer Price Index (CPI):
CPI in 2017 CPI in 2021
Source: Microsoft Word - Press release Jan%2c 2016 Final.doc (pbs.gov.pk) Source: Government of Pakistan (pbs.gov.pk)

9. What is Unemployment?
The term unemployment refers to a situation when a
person actively searches for employment but is unable
to find work. Unemployment is considered to be a key
measure of the health of the economy. The most
frequent measure of unemployment is the
unemployment rate, which is the number of
unemployed people divided by the number of people in
the labor force. Many governments offer
unemployment insurance to certain unemployed
individualswho meet eligibilityrequirements.

10. The Unemployment Formula:

11. Types of Unemployment:
• Frictional Unemployment: People are temporarily out
of a job but will be working again soon.
• Structural Unemployment: People are unemployed
because their job skills are no longer useful.
• Cyclical Unemployment: People who are unemployed
due to recession period in the business cycle.

12. Unemployment Rate of Pakistan: • The unemployment rate
remained steady from 2002 to
2010. Afterwards it started rising
and will remain rising in near
future.
• Minimum unemployment rate
was recorded in 2007 which is
0.4%
• Maximum unemployment rate
recorded in 2020 is 4.65%.
• Unemployment rate in the year
2000 was 0.63%.
• The expected unemployment rate
in 2025 is to be around 8.6%.

13. Comparing Unemployment rate of
Pakistan and India.

14. Monetary Policy:
• Both monetary and fiscal policies accorded prominent role in the pursuit of macroeconomic stabilization.
• These policies have been a serious debate between the two major school of thoughts that Keynesians and the
Monetarists.
• The Monetarists believe that monetary policy exert greater impact on economic activities, whereas the
Keynesian believe that fiscal policy rather than the monetary policy exert greater impact on economic
activities.
• Monetary Policy works under the Central Bank (SBP).
• They control money supply by setting exchange rate and interest rate.
• Monetary policy is concerned with the measures used to regulate money supply and credit in the economy
with aim to achieve outcomes of the higher economic growth and price stability.

15. Fiscal and Monetary Policies in Pakistan:
Fiscal Policy in Pakistan:
In Pakistan federal government budget categorizes in two parts; that is public revenue and expenditure. The
key objective of fiscal policy is to enhance and sustain economic growth and therefore to reduce
unemployment and poverty. By imposing taxes the government receives revenue from the populace
(population). The government spending take in form of wages to government employees, development
expenditure, social security benefits, health, education, defense etc.
Fiscal Policy
Govt Revenue Govt Expenditure
Net taxes =
Taxes – (Transfer
payments +
subsidy)
Fiscal Policy

16. Government Expenditures:
The federal government of Pakistan has divided the total expenditure in two main parts namely
current expenditure, and development expenditure. The share of current expenditure in total
public spending is 82.19% and development spending is 17.81 in fiscal year 2014-15. The major
parts of total public spending are general public service which is 59.75%, defense is 17%, and
Public Sector Development Program (PSDP) is 12.79%. However, the two major sectors
(educationand health) hold just 2% of total public spending.

17. Monetary Policy in Pakistan:
Monetary policy is the process by which the monetary authority of a country control the supply of money,
often targeting a rate of interest for the purpose of promoting economic growth and stability. In Pakistan, the
State Bank of Pakistan has the authority to adopt the tight, neutral or loose monetary policy. The key
objectives of a monetary policy in Pakistan are economic growth, price stability, exchange rate stability,
balance of payments (BOP) equilibrium, employment, neutrality of money, equal income distribution and
credit control.
D i rec t M o ne ta ry P o licy T o o ls:
I n direc t M o ne ta ry P o licy T o ols :

18. What is a Recession?
A recession means a significant decline in general economic activity. The macroeconomic term has traditionally
been recognized as two consecutive quarters of decline, as reflected by gross domestic product (GDP) and other
indicators such as unemployment. However, the National Bureau of Economic Research (NBER) currently defines
a recession as a significant decline in economic activity lasting more than a few months—normally visible in real
GDP, real income, employment, industrial production, and wholesale-retail sales.
6 w ay s o f m a naging R e ce ss ion:
• Live Within Your Means. (Don’t spend too much)
• Have Additional Income. (Always have part time jobs, e.g. Freelancing or Counselling work)
• Invest for the Long Term. (Invest in stocks for your retirement)
• Be Real About Risk Tolerance. (Might go in loss a bit)
• Diversify Your Investments.
• Keep Your Credit Score High. (Clear your debts to have a good portfolio)