Fisheries:

Pakistan has a total coast line of 1050 km. with a total fishing area of approximately 300270 sq.km. These fishing areas are rich in marine life and are home to species of commercial significance. Apart from marine fisheries, inland fisheries (based in rivers, lakes, ponds, dams etc.) are also commercial significant. Fisheries add substantially to the national income through export earnings. In 2014-15 the fisheries sub-sector registered a growth rate of 5.75 percent.

Crops

With a share of 11.1 percent in value addition of agriculture sector crops contribute 2.3 percent to the GDP. This sub-sector has grown mildly at 1.09 percent over the last year. Similarly growth has been registered production of crops such as onion, grams, lentils, chilies and potatoes. The fruit and vegetables production has remained stable.

Cotton Ginning

Cotton Ginning has 7.4 percent share in the crops subsector and 2.9 percent contribution in agriculture sector and contributes 0.6 percent in GDP of the country. Cotton ginning has witnessed significant growth registered which was at 7.38 percent last year.

Investment Potential

• Of the total 16.5 million hectares of cultivable land in Punjab, a vast 1.7 million hectares is still available for corporate farming.
• As much as 30% of horticultural produce that goes to waste every year can be converted into economic gain by investing in agribusiness value chain industries.
• Despite being 4^th largest milk producer globally and an average annual milk demand growth of 20 percent, only 8 percent of milk is processed in Pakistan. There is significant potential for setting up processing units and chillers for local consumption and export.
• Despite having the 3^rd largest livestock population, the average yield of milk per animal is one of the lowest in the world. Opportunity for investment exists in breed improvement, animal husbandry, veterinary medicines and genetic research labs.
• Meat demand in Pakistan is growing at 6 percent per annum. Fattening farms using modern techniques are a potential area of investment. Likewise, slaughter houses, meat processing units, Halal meat export, organic farming are significant areas of investment and growth potential.

Industrial Sector

The industrial sector in Pakistan contributes 20.30 percent to the GDP. It has four sub-sectors including mining and quarrying, manufacturing, electricity and gas generation and distribution, and construction. Each sub sector of the industrial sector has its own role and significance in the economy. Performance of these sub-sectors is given below:

Manufacturing Sector

Manufacturing sector accounted for 13.3 percent of GDP and employed 14.2 percent of the total employed labour force. There are three subsectors: Large Scale Manufacturing, Small Scale Manufacturing and Industrial processing.

Large Scale Manufacturing (LSM) contributes 10.6 percent of GDP and dominates the overall manufacturing sector, accounting 80 percent of the sector share. Small Scale Manufacturing accounts for 1.7 percent of total GDP and 13.0 percent of Manufacturing. Industrial processing accounted for only 7.0 percent of overall Manufacturing sector.

The manufacturing sector showed growth during July-March 2014-15 in products such as Iron and Steel at 35.63 percent, Automobiles at 17.02 percent, Leather Products at 9.62 percent, Electronics at 8.21 percent, Pharmaceuticals at 6.38 percent, Chemicals at 5.94 percent, Non-Metallic mineral products at 2.56 percent, Petroleum Products at 4.73 percent, Fertilizers at 0.95 percent and Textile at 0.50 percent.

Construction Sector

The contribution of construction in industrial sector is 12.0 percent. It provides employment opportunities to 7.33 percent of labour force. This sub-sector has potential for growth as demand is high, especially for low cost housing. The construction sector recorded a growth of 7.0 percent last year.

Electricity generation & distribution and Gas Distribution

This sub-sector of industr y plays an impor tant role in development of the country and also contributes to the growth of all sectors of the economy. Its share in industrial sector is 8.2 percent.

Mining and Gems

Sector Overview

Pakistan has enormous mineral potential including precious metals and dimension stones. Availability of abundant raw material, low cost of production, talented, artisans and mining concessions by the government makes this a primary sector for investment.

Pakistan has abundant reserves of coal, copper, rock salt, limestone and onyx marble, China clay, dolomite, fire clay, gypsum, silica sand and granite, as well as precious and semi- precious stones. This sub-sector contributes 2.9 percent of GDP. Mining and quarrying recorded a growth of 3.8 percent in 2014-15.

Investment Potential

Pakistan Mineral Development Corporation offers joint venture in the following projects:

• Gold and Base Metals Exploration in the Northern Areas of Pakistan
• Coal Briquetting Plants
• Coal mining for small thermal power plants
• Production of Ultra Refined Salt

Textile

Sector Overview

Pakistan is the 8th largest exporter of textile products in Asia. This sector contributes 8.5 percent to the GDP and provides employment to 40 percent of the industrial labour force. Pakistan is the 4th largest product of cotton with the third largest spinning capacity in Asia. The major markets of Pakistani yarn during 2011-12 were Bangladesh, Turkey, Egypt and Colombia.

Development of the textile Industry and making full use of its abundant resources of cotton has been a priority area in industrial policy. Following the GSP Plus Agreement with the European Union, Pakistan products now have a competitive edge in the European market.

Investment Potential

• As the 4th largest cotton producer and well developed textile industry, significant opportunities exist in setting up value-addition units, such as apparel lines.
• With the rising quantity and quality of domestic consumption, the textile industry is looking to expand capacity to meet the local demand. This provides investment opportunity.
• The investors in textile sector can take advantage of the Pakistan’s GSP Plus Status with European Union, which allows Pakistani products to enter the EU markets on concessional rates.

Energy

Sector Overview

As the Pakistani economy develops, the country face a severe power deficit as the demand for electricity has grown at a faster pace than the generation capacity. Power deficit is estimated to cost the economy 2 percent of GDP per annum. Current power deficit stands between 5,000- 8,000 MW. Current energy mix for power generation is heavily dependent on power generation (approximately 70 percent of generation mix). The Government’s focus is to encourage investments in indigenous resources to generate cheap electricity such as coal, nuclear, hydropower, solar and wind energy generation.

Investment Potential

Pakistan offers attractive incentive packages for power generation.

These include:

• Guaranteed uptake of power produced by Independent Power Producers (IPP) at profitable prices per unit.
• Liberal and transparent policy for investors to set up IPP projects.
• One-Window facilitation for power projects – Private Power Infrastructure Board (PPIB).
• Guaranteed Power Purchase Agreement (PPA) for IPPs, backed by sovereign guarantee of Government of Pakistan (GoP).
• 20 percent return on wind energy and between 14-17 percent return on equity in coal and solar energy.

PROSPECTS OF ECONOMIC GROWTH

Year 2014-15 was a good year for Pakistan’s economy, with projected GDP growth crossing 4 percent, driven by vibrant manufacturing and service sectors and improving energy availability.

With tax reforms and collection and restricted current and development expenditure, the economic indicators have improved. The Inflation Index (CPI) is the lowest since 2003, steady at 4.8 percent and the fiscal deficit is contained at around 3.8 percent of GDP. External reserves have grown with coordinated monetary and exchange rate policies. Private investment is also on the rise along with increased FDI.

In addition to monetary and fiscal policies, Pakistan’s recent economic growth has been driven mainly by the services and manufacturing sectors. Acceleration in growth of large-scale manufacturing comes from strong performance of agro-based industries, iron and steel, construction, cotton yarn and textiles. On the demand side, growth continues to be driven by increase in household consumption.