2016 Index of Economic Freedom


overall score55.9
world rank126
Rule of Law

Property Rights30.0

Freedom From Corruption29.0

Limited Government

Government Spending86.2

Fiscal Freedom79.0

Regulatory Efficiency

Business Freedom61.2

Labor Freedom42.1

Monetary Freedom71.5

Open Markets

Trade Freedom65.0

Investment Freedom55.0

Financial Freedom40.0

Embed This Data

Create a Comparison Chart

See how Pakistan compares to another country using any of the measures in the Index.

Download PDF
Quick Facts
  • Population:
    • 186.3 million
  • GDP (PPP):
    • $882.3 billion
    • 4.1% growth
    • 3.6% 5-year compound annual growth
    • $4,736 per capita
  • Unemployment:
    • 5.2%
  • Inflation (CPI):
    • 8.6%
  • FDI Inflow:
    • $1.7 billion
Embed This Data

Despite some progress in moving forward much-needed reforms, Pakistan still lags behind other countries in the region in enhancing competitiveness. Lingering social and political instability further undercuts sustainable advancement in installing a stable macroeconomic environment and the institutional capacity to realize the country’s relatively untapped potential for growth.

Economic Freedom Snapshot

  • 2016 Economic Freedom Score: 55.9 (up 0.3 point)
  • Economic Freedom Status: Mostly Unfree
  • Global Ranking: 126th
  • Regional Ranking: 26th in the Asia–Pacific Region
  • Notable Successes: Monetary Freedom
  • Concerns: Rule of Law and Regulatory Efficiency
  • Overall Score Change Since 2012: +1.2

The overall regulatory environment continues to be negatively affected by convoluted administrative bureaucracy, as reforms in this area have fallen short. Property rights are undermined by a weak and ineffective judiciary that is susceptible to political interference. Endemic corruption remains a serious drag on long-term economic development.



Prime Minister Nawaz Sharif, elected in 2013, governs an unstable democracy laboring under constant threat from Islamic extremists. Demonstrations in August and September 2014 led by Tehreek-e-Insaf party chief Imran Khan and religious leader Tahir ul-Qadri increased civil–military tensions. A December 2014 terrorist attack on a military school in Peshawar prompted Sharif to introduce a 20-point anti-terrorist National Action Plan. In early 2015, deteriorating Indo–Pakistani relations led to increased incidents along the border and sharp rhetoric between Pakistani and Indian officials. Pakistan’s release of terrorist mastermind Zakiur Rehman Lakvi from jail in April 2015 further strained Indo–Pakistani relations. Pakistan has privatized some state-run industries, but the economy is still heavily regulated, and poor security discourages foreign investment.

Rule of LawView Methodology

Property Rights 30.0 Create a Graph using this measurement

Freedom From Corruption 29.0 Create a Graph using this measurement

Pakistan is a repressed economy with regard to the rule of law and suffers from widespread corruption, lack of transparency, and little (if any) protection for property rights. Political and military interference in the inefficient judicial system is also prevalent. The National Accountability Bureau has made little progress in tackling official graft, largely because of inadequate political will and institutional capacity.

Limited GovernmentView Methodology

The top personal income tax rate is 30 percent, and the top corporate tax rate is 33 percent. The overall tax burden equals 10.5 percent of total domestic income. Government spending amounts to 21.4 percent of GDP. The deficit equals over 4 percent of total domestic product, and public debt equals 64.2 percent of GDP. To ease pressure on finances, the government has taken steps to privatize state-owned enterprises.

Regulatory EfficiencyView Methodology

Progress in improving the entrepreneurial environment has been only modest. The cost of completing licensing requirements is still over twice the average annual income. A large portion of the workforce is underemployed in the informal sector. In May 2015, the IMF and the government agreed that Pakistan should move gradually to full cost recovery in the power sector, increase electricity rates, and privatize power distribution.

Open MarketsView Methodology

Pakistan’s average tariff rate is 10 percent. Some imports of agricultural products are restricted. State-owned enterprises are active in the air transport, railway, and steel industries. Investment levels in some sectors of the economy are capped. A majority of commercial banks are private, but the banking sector remains vulnerable to state interference. Capital markets are underdeveloped.

Country's Score Over Time

Bar Graph of Pakistan  Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Pakistan  to other economic country groups Download Charts

Regional Ranking

rank country overall change
1Hong Kong88.6-1.0
3New Zealand81.6-0.5
7South Korea71.70.2
8Malaysia 71.50.7
10Brunei Darussalam67.3-1.6
11Thailand 63.91.5
17Sri Lanka59.91.3
19Kyrgyz Republic 59.6-1.7
26Pakistan 55.90.3
29Bangladesh 53.3-0.6
30Papua New Guinea53.20.1
37Solomon Islands470.0
42North Korea2.31.0
See Entire Region List ›

View all countries ›

Back to Top