It is about the macro economic framework of pakistan

1. Macro Economic Framework &
Performance

2. MACROECONOMIC FRAMEWORK IN
PAKISTAN
Institutional Framework
• Ministry of Planning, Development & Reform
Planning commission
• Ministry of Finance Economic Affairs Division
• State Bank of Pakistan
• Pakistan Bureau of Statistic

3. Planning Commission
• sets longer term vision and priorities
integrative role in sectoral policy formulation
tracks progress against respective goals and
ensure optimal utilization of scarce resources

4. TYPES OF PLANS
Perspective Plan
• Long Term Vision
• Economic, Social
and Technological
Policy Framework
(10‐25 years)
• Statement of Goals
& Targets.
Mid Term Plan
• Broad Framework
for formulation of
annual plans (3-5
years)
• Strategy and time
frame for
achievements and
targets
Annual Plans
• Instrument for
translating long term
goals and medium
term targets into
operational framework
• Performance
evaluation of inputs
in achieving key
annual targets
• Investment
programming in the
public sector and
indicative targets
for private sector.

5. Growth & Development Objectives
Achieve 5‐6% growth in medium and 7‐8% inclusive and
sustained growth in long term by
• Ensuring macroeconomic stability
• Removing energy shortages
• Managing Internal Security
• Reforming PSEs
• Enhancing productivity and competitiveness
• Vibrant markets and trade openness
• Quality Governance
• Creative Cities
• Connectivity to compete
• Youth and Community

6. Pakistan Economy
• Pakistan’s economy experienced relatively fast growth during
the 1970s, 1980s, and the early 1990s. There have been three
distinct phases.
• First, between the early 1970s and the early 1980s, gross
domestic product (GDP) growth showed an upward trend,
reaching almost 9% in 1980.
• The rest of the decade and until the early 1990s, the trend
flattened and growth fluctuated between 5% and 7.5%.
• Finally, between the early and late 1990s, growth displayed a
downward trend. During this period, the economy suffered two
major slowdowns, first in 1993 and then in 1997.

7. Economic Growth
• The economy of Pakistan is the 23rd largest in the world in
terms of purchasing power parity (PPP), and 42nd largest in
terms of nominal gross domestic product.
• Pakistan has a population of over 220 million (the world's 5th-
largest, giving it a nominal GDP per capita of $1,357 in
2019, which ranks 154th in the world and giving it a PPP GDP
per capita of 5,839 in 2019, which ranks 132nd in the
world for 2019.
• However, Pakistan's undocumented economy is estimated to
be 36% of its overall economy which is not taken into
consideration when calculating per capita income.

8. Inflation:
• It refers to a situation of constantly rising prices of
commodities and factors of production. The opposite situation
is known as deflation.
• During inflation some people gain and most people lose. So
there is a change in the pattern of income distribution.
Therefore, one of the objectives of government policy is to
ensure price level stability which implies the absence of
inflation and deflation.

9. • Unemployment refers to involuntary idleness of
resources including manpower.
• If this problem exists, society’s actual output (or
GNP) will be less than its potential output.
• So one of the objectives of Government policy is to
ensure full employment which implies absence of
involuntary unemployment of any type.

10. • Unemployment is one of the major issues Pakistan has been
dealing with for over a decade now.
• In Pakistan, unemployment is very high.
• Which causes standard of living to drop.
• Basic needs are not being fulfilled and many other serious
issues have increased due to unemployment.
• You will find so many graduates, master students,
professionals being wasted due to unemployment in Pakistan.

11. • Recently, the unemployment rate of Pakistan
increased to 4.5% and so it can be said that one out of
every 10 people of the country are suffering from
unemployment.
• The unemployment rate in urban areas of Pakistan
increased by 2% to 10.1%, whereas, the
unemployment rate in rural areas increased from
4.3% to 5% •

12. The Trade Cycle:
• It refers to periodic fluctuations in the levels of economic or
business activities, i.e., the tendency for output (GNP) and
employment to fluctuate over time in a recurring sequence
of ups and downs.
• The periods of good trade alternate with periods of bad
trade, or, boom periods of high output and high employment
alternate with slump periods of low output and low
employment.
• In boom periods, employment is low but the rate of inflation
is high. In periods of depression (or recession)
unemployment is high and the rate of inflation is moderate.
In macroeconomics we study the causes of business cycles
and suggest remedial measures.

13. Stagflation:
• Most modern mixed economics suffer from the disease of
stagflation which implies the co-existence of inflation and
unemployment in a stagnant economy.
• The trade-off between inflation and unemployment is perhaps
the most complex macroeconomic issue of the day.
• Every country in the world is now struggling hard to fight the
disease of stagflation.

14. Economic Growth:
• In spite of short-term fluctuations of output that are
associated with the trade cycle, the long-term trend of
total output has been upward in most industrially
advanced country.
• The trend in the nation’s total output over the long
period is known as economic growth.

15. There are three major sources of growth
• (1) The growth of the labour force,
• (2) Capital formation and
• (3) Technological progress.
• A country seeks to achieve economic growth mainly for
improving the standards of living of its people. If the rate of
economic growth exceeds the rate of population growth, there
is likely to be an improvement in the standard of living for the
average person.

16. The Exchange Rate and the Balance of Payments:
• Exchange rate is the price of one currency is in terms of
another currency
• The balance of payments is a systematic record of all
economic transactions between the members of the home
country and the rest of the world in an accounting year. These
transactions are largely, if not entirely, influenced by the
exchange rate. It is the rate at which a country’s economy is
exchanged for another currency (or gold).
• The trend in the value of the rupee in terms of two major
currencies of the world, viz., the U.S. dollar and British pound,
has been downward in the last two decades. Economists are
always eager to discover the cause and consequences of such
changes.