Pakistan Economic Survey 2024-25: GDP Growth at 2.7% Amidst Fiscal Improvements
According to the survey, Pakistan’s economy has grown from $372 billion in FY24 to $411 billion in the outgoing fiscal year.
Pakistan’s economy is projected to grow by 2.7% in the fiscal year ending June 2025, according to the government’s Economic Survey 2024-25.
The survey, released on Monday, comes ahead of the federal budget announcement and highlights the country’s economic performance across various sectors.
The GDP growth target of 3.6% was missed, with the economy posting a 2.7% growth rate. Despite this, Finance Minister Muhammad Aurangzeb termed it a gradual recovery, emphasizing the government’s commitment to sustainable growth.
The International Monetary Fund (IMF) anticipates a real GDP growth of 2.6% for FY25 and expects a 3.6% expansion in FY26
Delving into the key statistics, the finance chief emphasized the significant drop in the policy rate from 22% to the current 11% and noted record recoveries in the power sector, attributing them to ongoing reforms.
Highlighting a 7% rise in Pakistan’s exports, Aurangzeb underscored the country’s expanding Information Technology (IT) sector, noting that freelancers generated earnings of $400 million during the outgoing fiscal year, while IT exports reached $2.8 billion.
He further stated that despite an 11.7% increase in imports, the current account posted a surplus of $1.9 billion from July to April, alongside a 26% boost in revenue collection.
Addressing the crucial matter of remittances — a vital source of foreign exchange — the federal minister noted a $10 billion increase over the past two years.
Sector Performance and Challenges
The agricultural sector recorded subdued growth of 0.56%, while industries and services grew by 4.77% and 2.91%, respectively. Large-scale manufacturing (LSM) contracted by 1.5% due to high costs and supply constraints during FY25.
The government acknowledged that if the agriculture sector had grown at the targeted rate, the overall growth rate would have been closer to the initial target.
Fiscal Improvements and Debt Management
The survey indicates improvements in fiscal indicators. The fiscal deficit narrowed to 2.6% of GDP during July–March FY25, down from 3.7% in the same period last year. The government achieved a primary surplus of 3.0% of GDP for July-March FY25, compared to 1.5% in the same period last year. Pakistan’s debt-to-GDP ratio has decreased from 68% to 65%.
Monetary Policy and Inflation
Pakistan’s central bank has reduced its policy rate by over 1,100 basis points this year. The most recent reduction brought the key rate down to 11%. CPI inflation has decreased from over 29% in 2023 to 4.6%.
Government Perspective
Finance Minister Aurangzeb stressed the need for structural reforms to fundamentally change Pakistan’s economic DNA. He reiterated the government’s commitment to staying the course and ensuring a sustainable growth trajectory.
The Economic Survey serves as a crucial document ahead of the annual federal budget, providing detailed insights into Pakistan’s socio-economic performance.
According to the survey, Pakistan’s economy has grown from $372 billion in FY24 to $411 billion in the outgoing fiscal year.
