Pakistan’s GDP Grows 2.7%, Inflation Drops Sharply: Economic Survey 2024–25
News Desk
Islamabad: Pakistan’s economy recorded a growth rate of 2.7 percent for the fiscal year 2024–25, according to the National Economic Survey released by Finance Minister Muhammad Aurangzeb on Monday. The report signals cautious optimism over the country’s economic direction, with notable improvements in key macroeconomic indicators.
Addressing a press conference in Islamabad alongside Finance Secretary Imdadullah Bosal and Chief Economist Dr. Imtiaz Ahmed, Aurangzeb said, “Pakistan’s economic indicators have improved under the leadership of Prime Minister Shehbaz Sharif. This year’s GDP growth of 2.7 percent is a reflection of the recovery momentum.”
He noted that the country had emerged from a contraction of -0.2 percent in 2023 and posted a 2.5 percent growth in 2024. The current progress, he said, comes amid global economic slowdowns, and therefore, “Pakistan’s performance must be viewed within this broader international context.”
Inflation and Interest Rate Decline
Aurangzeb highlighted a sharp decline in inflation—from a peak of 29 percent to just 4.5 percent—and a policy rate cut from 22 percent to 11 percent. “This demonstrates macroeconomic stability and a turnaround in market confidence,” he added. The debt-to-GDP ratio also improved, falling from 68 percent to 65 percent.
Governance and Energy Sector Reforms
The finance minister attributed the recovery to better governance, including the appointment of professional boards in power distribution companies (DISCOs) and restructuring of the National Transmission & Despatch Company (NTDC) into three entities. “Reforms in the energy sector aim to plug legacy issues and reduce ongoing leakages,” he said.
However, he acknowledged that state-owned enterprises (SOEs) remain a burden on the exchequer, with annual losses nearing Rs800 billion.
Positive International Outlook
Aurangzeb said that international financial institutions had taken note of Pakistan’s recovery. “Fitch upgraded Pakistan’s credit rating, while Moody’s changed its outlook to positive. We received the IMF tranche on merit, despite global and regional challenges,” he noted. He also announced that the IMF had approved climate financing, while the World Bank committed annual funding of $2 billion.
External Sector and Remittances
Despite twin deficits in the external sector, the current account recorded a surplus of $1.9 billion. Remittances are expected to hit $38 billion by June 2025. “Roshan Digital Accounts have crossed 800,000, playing a critical role in attracting non-resident Pakistani investments,” the minister added.
Taxation, Pensions, and Domestic Resources
Tax revenues increased by 26 percent from July to May, while income tax filers exceeded 3.7 million, marking a 178 percent rise in high-value filers. Contributory pension reforms have also been rolled out. “Our goal is to raise the tax-to-GDP ratio to 14 percent, reduce dependency on external financing, and strengthen the Debt Management Office,” Aurangzeb said.
Agriculture and Climate Initiatives
The government has ended intervention in pricing of key crops like rice and maize, encouraging market-driven mechanisms. Agricultural loans surpassed Rs2 trillion, and the government plans to launch new projects addressing climate change next year.
Structural Reforms and Rightsizing
Aurangzeb said over 400 departments across 43 ministries are being reviewed under a phased rightsizing initiative, with several already merged or dissolved. “We are introducing a modern treasury system and planning to move towards long-term bonds to manage liabilities,” he said.
Finance Secretary Imdadullah Bosal added that fiscal deficit had been significantly reduced. “We’ve cut spending to the maximum extent possible,” he said.
Security, Sovereignty, and Future Outlook
Aurangzeb underlined that economic security was directly linked to national security. He praised the armed forces for their role in protecting the country’s sovereignty, claiming that India’s representative attempted to obstruct Pakistan’s progress at the IMF.
Looking ahead, the government aims for a 4.2% growth target for FY2025–26, with a focus on job creation, minimum wage enforcement, and poverty alleviation. An NFC meeting is scheduled for August to discuss fiscal decentralization and support for vulnerable groups.
“The economy has stabilized, and we’re moving in the right direction. But for long-term sustainability, deep structural reforms remain essential,” Aurangzeb concluded.
