Pakistan’s Market Progressing More Than China and India

(Last Updated On: 18/09/2016)

It seems the good days are coming for Pakistan. The start of CPEC brings marvelous opportunities for the country that can be witnesses in massive investment by the locals in Gawadar and the overall situation of Pakistan Stock Exchange.

Recent research by Forbes on international trade has revealed that the equity market in Pakistan has been outperforming the market of India and China by a huge margin over the past few years. The Global X MSCI Pakistan ETF was up to 20% as compared to the two to one of India and China. Here is the table:

Index/Fund12-month Performance5-year Performance
Global X MSCI Pakistan (NYSE:PAK)20%400%*
IShares China (NYSE:FXI)9.80%16.00%
iShares S&P India 50 (NASDAQ:INDY)12.77%33.0%
iShares MSCI Emerging Markets  (NYSE: EEM)

The country is witnessing the growth because of continuous decline in the terrorist activities and extremism phenomena. Foreigners are now considering the country as a stable country. In term of foreign direct investment, it is still lagging behind both China and India. Here is the table showing unemployment and GDP growth rates of Pakistan as compared to the China and India.

Pakistan’s, India’s and China’s Key Metrics

GDP$10866 billion2074 billion$270 billion
GDP Growth yoy6.7%7.1%4.24%
Inflation Rate1.3%5.05%3.56%
Capital flows-594 HML-$300 million-$1882 million
Government Debt to GDP43.9%67.2%64.8%

The recently released report by Center for International Development at Harvard University about Pakistan economy has stated that Pakistan is emerging as the next big Asian economy. The country will likely to surpass every Asian country economy except China. The report also claimed that in next ten years Pakistan GDP would remain 5.07 as compared to the 6.98 and 4.28 of India and China respectively.

Last Year, Economist in its report has also claimed the sign of optimism for Pakistan’s economy.

“Those in search of a thriving stock market, a stable currency and low inflation would not normally pitch up in Pakistan. It is more readily thought of as a pit of instability than as a source of opportunity. Yet Pakistan is enjoying a rare period of optimism about its economy,” The Economist said in a recent article about Pakistan’s economy.

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