Pakistan Economic Survey 2024-25, highlighting a Gradual recovery

• News By : Web Desk
• 2025-06-09 11:14:09

Islamabad: 6-9-2025: Finance Minister Muhammad Aurangzeb on Monday presented the Pakistan Economic Survey 2024-25, highlighting a “gradual recovery” driven by sustained government efforts throughout the fiscal year. The survey, released ahead of Tuesday’s federal budget, outlines key socio-economic trends and performance indicators.

Speaking in Islamabad, Aurangzeb noted global GDP growth is projected to decline to 2.8% in 2025 from 3.5% two years ago. “Our recovery must be seen in the global context,” he stated.

Pakistan’s GDP, which contracted by 0.2% in 2023, is expected to grow by 2.5% in 2024 and 2.7% in 2025. Aurangzeb emphasized the focus on sustainable growth, steering away from “boom and bust” cycles.

Inflation & Monetary Policy

The minister said inflation had eased significantly—from 29% CPI in 2023 to 4.6% now. Global CPI inflation is projected to decline from 6.8% (2023) to 4.3% (2025). Interest rates also dropped from a record 22% to 11%, with Rs800bn saved in debt servicing.

Public debt fell from 68% to 65% of GDP. Foreign reserves rose to $9.4bn as of June 2024, up from near depletion last year.

IMF & Structural Reforms

Aurangzeb credited PM Shehbaz Sharif’s leadership for restoring credibility with the IMF, starting with the Stand-by Arrangement and now seeking an Extended Fund Facility to ensure macroeconomic stability and pursue long-needed structural reforms.

He stressed the need to overhaul the economy’s fundamentals, including state-owned enterprises (SOEs), of which 24 are being privatized. Rs800bn was spent on SOEs in equities and guarantees—a drain he deemed unsustainable.

Revenue & Tax Reforms

Pakistan's tax-to-GDP ratio hit a five-year high. Tech-driven reforms (e-invoicing, AI audits, faceless customs) boosted collections. Filers doubled to 3.7 million; high-value filers rose by 178%. Retail registrations grew by 74%.

Debt Management

Rs1 trillion in local debt was repaid. The government, no longer a “desperate borrower,” is signaling banks to increase private sector lending. Aurangzeb aims to restructure debt management offices to global standards and increase average maturity to reduce refinancing risk.

External Sector

The current account showed a $1.9bn surplus (July 2024–April 2025), reversing a $1.3bn deficit the previous year. Exports rose 7%, especially in IT, with freelancers earning nearly $400m. Imports rose 12%, signaling recovery.

Remittances surged by 31%, reaching $37–38bn, with a record $4.1bn in March alone. Inflows via Roshan Digital Accounts exceeded $10bn, with 814,000 accounts opened.

Industrial & Services Growth

Industrial output rose 4.8% (vs. -1.4% last year). Construction grew 6.6%, small-scale manufacturing by 1.3%, though large-scale manufacturing contracted. Gains were seen in autos (+40%), apparel (+8%), textiles (+2%), and petroleum (+4.5%).

The services sector expanded by 2.9%, led by IT (+6.5%), real estate (+3.8%), food services (+4.1%), and transport, boosted by port and airline activity.

Agriculture & Livestock

Agricultural growth was limited to 0.6% due to a 13.5% fall in major crops (cotton, wheat, maize). However, livestock rose 4.7%, with poultry up 8.1%. Fruits, vegetables, fisheries, and forestry also showed gains.

Aurangzeb advocated for phasing out inefficient entities like PASSCO and called for investment in storage infrastructure to support small farmers. Credit to agriculture rose 16%, crossing Rs2tr.

Public Sector Reforms

Government rightsizing is underway, targeting 43 ministries and 400 departments. The focus is on streamlining operations and cutting waste.

Fiscal Highlights

GDP growth in FY2024-25: 2.7%; target for FY2025-26: 4.2%

Fiscal deficit reduced to 2.6% of GDP

Primary surplus recorded at 3% of GDP

Credit to private sector: Rs681bn (July 2024–May 2025)

The Annual National Development Programme (ANDP) allocates Rs3.48tr for 2024–25, with Rs1.1tr for federal and Rs2.38tr for provincial projects.

Conclusion

Aurangzeb expressed confidence in Pakistan’s economic turnaround, citing disciplined fiscal policy, tech-enabled tax reform, external account recovery, and structural adjustments. He pledged continued reforms to ensure sustainable growth, address legacy issues, and invest in the country’s social and development sectors.

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