ISLAMABAD: While showing his readiness to constitute a steering committee to clear suspicion on the authenticity of growth projection, Federal Minister for Finance Muhammad Aurangzeb unveiled the Economic Survey for 2024-25 and claimed a “gradual recovery” after striking an IMF deal.
He stated that he owned official data released through the Economic Survey, as it was government-owned figures on growth and other sectors. Still, he offered the private sector the opportunity to get involved in verifying the official data.
The agriculture sector nosedived in the outgoing fiscal year 2024-25 remaining slightly positive at 0.56 percent against 6.4 percent in the last financial year. The major crops witnessed a significant decline of over 30 percent, especially cotton, maize, and wheat.
The per capita income in dollar terms increased to $1,824 against $1,622 in the last fiscal year. The size of the economy stood at $411 billion in FY2025. On a positive trajectory, the inflation has fallen sharply and expected to remain at 4.7 percent on average in CFY against 26 percent on average in the last 10 months of previous fiscal. However, the Economic Survey 2024-25 did not show the latest estimates on poverty and unemployment in Pakistan.
“The economy has turned into a positive direction and everyone including Multilateral Creditors such as the IMF, WB, ADB and credit rating agencies acknowledged and praised our determination to stay on course after Standby Arrangement and Extended Fund Facility struck with the IMF.”
Pakistan might have faced difficulty in securing a tranche from the IMF under EFF and getting Climate Finance Facility if implementation on IMF programme would have witnessed slippages. Despite India’s opposition, the IMF Board approved and released the second tranche, Minister for Finance Muhammad Aurangzeb said while releasing the Economic Survey for 2024-25 here at the P Block on Monday.
Accompanied by Secretary Finance Imdadullah Bosal, Economic Adviser Ministry of Finance Dr Hassan Mohsin, Chief Economist Dr Imtiaz Ahmed and others, the finance minister said that the global economy witnessed a decline but Pakistan’s showed a gradual recovery in the outgoing fiscal year. On a question with regard to population, the minister said that the premier gave direction to convene the National Finance Commission (NFC) meeting by August 2025 and there was a need to exclude population from the criteria for distribution of financial resources. However, he added in the same breath that the NFC could be done in consensus with the provinces.
On a question regarding rationalization of expenditure, secretary finance said that the expenditure cut was done and there was no further room available to move ahead. The minister said that it was not the job of the government to provide 10 million jobs but they could provide enabling environment and complete echo system for the private sector to generate jobs. He hinted some relief for salaried class in the coming budget and said that the technology and simplification of processes would help generate the desired tax revenues. If the tax net was not broadened, then there will be no other option but to burden the existing one, he added.
Pakistan’s GDP grew by 2.68 percent, supported by stabilization across all major macroeconomic indicators. The industrial sector posted a growth of 4.77 percent. Manufacturing growth was also positive despite a slow recovery in large-scale manufacturing, supported by gains in small-scale manufacturing and slaughtering. The services sector (58.4% of GDP) emerged as the main growth driver, expanding by 2.91 percent, while the agriculture sector recorded a growth of 0.56 percent due to a decline in major crops.
The GDP, valued at current market prices, reached Rs114,692 billion (US$411 billion), showing a 9.1 percent increase from the previous year’s Rs105,143 billion (US$372 billion). The economy experienced price stability, with GDP deflator growth recorded at 4.0 percent, the lowest level since FY2018, which has helped stabilizing the exchange rate. Thus, with improved economic activity, per capita income rose to US$1,824 from US$1,662 in the previous year.
The investment-to-GDP ratio improved to 13.8 percent, compared to 13.1 percent in FY 2024, supported by stronger public and private capital formation. Gross Fixed Capital Formation (GFCF) stood at Rs13,814.7 billion, marking a 15.0 percent increase over FY2024. Private investment grew by 9.9 percent, while public investment, including general government development spending, rose sharply by 34.2 percent. National saving also improved, recorded at 14.1 percent of GDP, reflecting stronger domestic resource mobilization.
The tax to GDP ratio, he said, would have to be increased up to 14 percent in Pakistan and reminded that India’s stood at 18 percent. The economic security of the country is essential as the armed forces demonstrated their capability in recent adventure done by India.
Despite challenging climatic conditions, the agricultural sector demonstrated a slight positive growth rate of 0.56 percent. Livestock emerged as the primary contributor, achieving an expansion of 4.72 percent. Similarly, the fisheries and forestry sub-sectors exhibited steady growth rates of 1.42 percent and 3.03 percent, respectively, bolstered by favorable policy measures and prevailing market dynamics.
The crops sub-sector experienced a contraction of 6.82 percent, primarily driven by a 13.49 percent decline in key crops and a 19.03 percent decrease in cotton ginning. These downturns can be attributed to adverse weather conditions and reduced sowing areas. Nevertheless, a growth of 4.78 percent in other crops indicates the potential for crop diversification and demonstrates resilience in the face of challenging circumstances.
Wheat production experienced a decline of 8.9 percent, attributable to a reduction in cultivated area and adverse climatic conditions. Conversely, while rice exhibited an increase in acreage, it nonetheless encountered a minor dip in production of 1.38 percent. Other crops, including cotton (-30.7%), sugarcane (-3.88%), and maize (-15.4%), faced considerable challenges due to decreased planting area, delayed sowing and extreme weather patterns. On a more positive note, vegetable categories such as onion and potato reported substantial output growth.
During July-March FY2025, Large-Scale Manufacturing (LSM) experienced a contraction of 1.47 percent, in contrast to a slight decline of 0.22 percent observed in the corresponding period of the previous year. This marks the third consecutive year of negative growth in LSM, which can be attributed to ongoing structural challenges, elevated input costs and downturns in critical sectors such as food, chemicals, iron & steel, and electrical equipment. Despite the overall lackluster performance, it is noteworthy that nearly half of the LSM sectors demonstrated positive growth, including significant industries such as wearing apparel, textiles, coke & petroleum products, pharmaceuticals, and automobiles.
The Mining and Quarrying sector experienced a decline of 3.4 percent during FY2025, an improvement from a decrease of 4.0 percent observed in the previous year. During July-March FY2025, there were significant reductions in the extraction of crude oil (-14.8%), natural gas (-6.8%), coal (-5.7%), and iron ore (-20.2%), which indicates a contraction in both energy and metallic mineral outputs. Conversely, there were marked increases in the production of sulphur (341.9%), dolomite (43.3%), limestone (34.1%), marble (20.2%), and ocher (70.3%), suggesting positive growth in specific mineral categories.
Domestically, Pakistan’s economy has displayed consistent signs of stabilization and recovery during FY2024 and FY2025, driven by proactive governmental interventions and sound macroeconomic management. Inflation has significantly decelerated, foreign exchange reserves have strengthened, and the exchange rate has stabilized. In response, SBP initiated a measured easing cycle beginning in June 2024, cumulatively reducing the policy rate by 1100 basis points as of May 2025.
Inflation is anticipated to remain within the SBP’s medium-term target range of 5 to 7 percent, facilitating ongoing monetary policy normalization and an economic recovery in FY2026. The sustainability of this positive momentum will hinge on preserving macroeconomic stability, effective policy coordination, and creating a conducive environment for investment, job creation, and external financing inflows, which are essential for ensuring broad-based growth and financial stability.
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