‘Pakistan witnessed transition from bad to recovering economy’

Islamabad: Executive Director of Sustainable Development Policy Institute (SDPI) Dr Abid Qaiyum Suleri has said that 2024 was a year of economic stabilisation and recovery as negative GDP growth, heightened policy and inflation rates transitioned to positive indicators showing reviving growth trajectory.

Dr Suleri was addressing a seminar on ‘Pakistan's Economic Outlook for 2024’ hosted here by SDPI. Dr Suleri acknowledged the substantial progress made in 2024, citing a projected 3% GDP growth, a tripling of foreign reserves to $12.25 billion and a significant reduction in inflation and policy rates.

He also pointed out that 2025 would be a crucial year, hinging on IMF programme commitments, tax reforms, climate change management and political stability. “Economy in 2025 will depend on a combination of factors, including Pakistan’s relationship with IMF, USA, and China, climate resilience efforts, political stability and investment in human development,” he said.

The revival of political negotiations is a beacon of hope, he said, noting the positive impact of improved relations between the government and opposition. Dr Suleri noted the importance of improved administrative control to manage inflation, citing the lack of regulation in sugar mills and poor stock management. He also stressed the discontinuation of SDPI’s food security dashboard at the Ministry of Food Security, underscoring the need for better data management and regulatory oversight.

As Pakistan navigates a challenging yet promising economic landscape, Dr Suleri agreed that while stabilisation has been achieved, significant reforms and strategic planning would be essential for sustainable growth in 2025 and beyond. Senior economist Dr Khaqan Hassan Najeeb, stressed that Pakistan’s economic recovery was only the third time in the last decade that the country had turned to the IMF for assistance. He emphasised the need for urgent reforms in taxation, agriculture productivity and fiscal expenditure, warning that without substantial restructuring, Pakistan's growth rate would remain below 1%. He also called for improved economic diplomacy, particularly with China, to unlock potential investment avenues.

Dr Shafqat Munir, deputy executive director, SDPI, opened the session by highlighting the government’s growing confidence in Pakistan’s economic recovery. Referring to a recent press conference by the Finance Minister, he noted the optimistic economic indicators, signalling a potential turnaround after a challenging 2023. Dr Fareeha Armughan, SDPI expert, highlighted the government’s substantial increase in social protection allocations, marking a historic high of 594 billion rupees. However, she pointed out that critical sectors like education and institutional governance remain underfunded and mismanaged. According to her, aligning fiscal decisions with climate change and disaster risk reduction policies was crucial for long-term stability.

Dr Sajid Amin Javed, deputy executive director, SDPI, concluded the session by noting the decline in inflation rates and rupee stabilisation. However, he emphasised that the government must remain cautious and proactive in 2025, particularly in energy inflation and employment targets. He warned that despite improvements, the economic foundation remains weak and needs stronger administrative measures, especially in sectors like agriculture and IT.