Pakistan has witnessed radical economic growth over the past 10 years and according to the Business Monitor’s International report, Pakistan will be among the top 10 emerging markets from Africa and Asia.
Pakistan formerly had an agriculture based economy, exporting goods such as rice and fruit. Textile has also contributed to the GDP of the country but now Pakistan is leaning towards manufacturing. In the coming years Pakistan will become a manufacturing hub. As the energy prices are getting lower and lower day by day and the domestic energy supply is showcasing certain improvements, the investment in the manufacturing industry is guaranteed to increase.
Currently, the textile sector of Pakistan is showing tremendous increase and the automotive sector is following close behind.
The operations conducted by the Government to rid the country from terrorists is giving hope to businessmen and so more and more investors are looking to invest in different economic sectors of Pakistan.
From 1994 to 2008 Pakistan was a member of MSCI EM (emerging markets) index but it was removed when the stock market crashed in 2008. MSCI provides international investment decision support tools. In 2008 MCSI classified Pakistan as a standalone country index. Then in May 2009 Pakistan was made a part of the Frontier Markets index (FM). In 2015, Pakistan was added into the list for possible classification in the EM index and then in 2016 the MSCI announced its decision to reclassify Pakistan in EM index because of its improved transparency and liquidity. This induction will bring in more investment as emerging markets attract more investors than frontier markets.
The Bench mark rate of Pakistan’s stock exchange has also increased up to 15%, which makes Pakistan the best performer in Asia.
The developed countries are facing certain difficulties, due to which their economies are growing at slow rates. All this has caused the central bank to decrease interest rates, causing the government debt to seem less attractive in case of investment. This has led to frustration among people who want to invest their funds and so they have shifted their attention towards developing countries such as Pakistan.
A UK based management group known as Jupiter Asset Management have invested in Pakistan and have witnessed increased returns. Jupiter Asset Management has seen an increase of 17% in revenue this year. They took a chance and invested in Pakistan even when it was not considered an emerging market.
Pakistan has gained much needed acknowledgement and approval from International lending agencies such as the IMF for maintaining their economy and stabilizing it. The government of Pakistan achieve this by bringing various reforms in several sectors.
An explosive increase in the construction sector of the country has been forecasted and industries such as Mining and Gas will play a smaller role in the economy as compared to the revenue it provided in the former years. It has also been predicted that there will not be much of a change seen in the commodity-driven model.
There is a lot of capacity in Pakistan’s economy to favour economic growth. There is room for improvement and investment to result in healthy returns.