Pakistan’s Economic Performance: Gains and Misses

Pakistan’s GDP grew by 2.7% in FY 2024-25, falling short of the 3.6% target. Inflation dropped to 4.6%, marking economic stability, while the policy rate declined from 22% to 11%. A notable 26% rise in revenue collection and a $1.9 billion current account surplus highlighted fiscal improvements.

Exports grew by 7%, with IT freelancers contributing $400 million and IT exports reaching $2.8 billion. Remittances surged by $10 billion over two years, providing foreign exchange stability. The number of individual tax filers doubled, reflecting government efforts to expand the tax base.

Despite overall growth, agriculture struggled with a 13.49% decline in major crops, though livestock and select crops saw gains. The industrial sector grew by 4.77%, with mining and large-scale manufacturing contracting while electricity and construction thrived. Services expanded by 2.91%, led by finance and government services.

The fiscal deficit narrowed to 2.6% of GDP, aided by fiscal discipline and increased revenue collection. The Benazir Income Support Programme allocated Rs471 billion for social welfare. With continued reforms and IMF support, Pakistan eyes a medium-term GDP growth target of 5.7%.