Economic Comparison: Pakistan vs. Afghanistan

Key Economic Indicators

• GDP (Nominal): Pakistan’s GDP is $314.6 billion, ranking 41st globally, while Afghanistan’s is $19.4 billion, ranking 116th ^[4].
• GDP Growth Rate: Pakistan’s 1-year growth rate is 5.2% and 5-year average is 4.7%, compared to Afghanistan’s 2.3% (1-year) and 2.2% (5-year average) ^{[6], [7]}.
• GDP Per Capita: Pakistan’s GDP per capita is $1,500, significantly higher than Afghanistan’s $521 ^[4].
• GDP Per Capita Growth: Pakistan’s GDP per capita growth is 3.68%, while Afghanistan’s is -1.35%, reflecting economic contraction ^[0].

Financial System and Human Development

• Income Tax Rate: Pakistan’s income tax rate is 30%, compared to Afghanistan’s 20% ^[0].
• Corporate Tax Rate: Pakistan levies a 30% corporate tax rate, while Afghanistan’s is 20% ^[0].
• Inflation Rate: Pakistan’s inflation rate is 3.9%, higher than Afghanistan’s 0.6%, which benefits from stable exchange rates and UN aid ^{[6], [7]}.
• Unemployment Rate: Afghanistan’s unemployment rate is 1.5%, lower than Pakistan’s 3%, though underreporting and informal labor markets may skew these figures ^[0].

Government Debt and Reserves

• Central Government Debt: Pakistan’s debt is 72.1% of GDP, significantly higher than Afghanistan’s 7.1%, reflecting Pakistan’s heavier reliance on borrowing ^[0].
• External Debt Stocks: Pakistan’s external debt is $91 billion, compared to Afghanistan’s $2.6 billion, constrained by sanctions and frozen assets ^{[0], [1]}.
• Total Reserves: Pakistan holds $11.8 billion in reserves (including gold), compared to Afghanistan’s $8.2 billion, despite frozen central bank assets ^[0].

Economic Structure

• Exports: Pakistan’s exports contribute 8.8% to GDP ($31 billion in 2024, mainly textiles and agriculture), while Afghanistan’s contribute 5.9% ($2 billion, mostly agricultural and mineral products) ^{[6], [0]}.
• Imports: Afghanistan’s imports account for 45.3% of GDP ($7 billion in 2022), far exceeding Pakistan’s 19.7% ($53.2 billion in 2024), reflecting Afghanistan’s trade dependency ^{[6], [0]}.
• Industry Value Added: Industry contributes 18% to Pakistan’s GDP (manufacturing, textiles), compared to 22.1% in Afghanistan (small-scale production, mining) ^{[0], [1]}.

Conclusion

Pakistan’s economy significantly outpaces Afghanistan’s in scale, with a GDP 16 times larger and stronger growth rates, driven by a diverse industrial base and global trade integration. However, Pakistan faces challenges with high debt (72.1% of GDP) and inflation (3.9%). Afghanistan’s smaller economy, heavily reliant on agriculture and imports, benefits from lower inflation (0.6%) and debt (7.1%), but is constrained by political instability and frozen assets. Both nations face structural hurdles—Pakistan with fiscal deficits and Afghanistan with aid dependency—but Pakistan’s larger market and resources give it a stronger economic position, while Afghanistan’s recovery shows resilience ^{[4], [8], [12]}.