The Economic Study 2024-25, a central prior budget document, comes at a time when Pakistan’s economy stabilizes, but remains fragile as the country navigates reforms under a $ 7 billion International Monetary Fund (IMF) program.
Pakistan’s federal budget for the next financial year starting July will be released on Tuesday.
Here is a collapse of the study, which is analyzed by the brokerage company ARIF HABIB LIMITED:
- Pakistan’s economy grew by 2.68% in FY25 and showed signs of stabilization. GDP at current prices increased by 9.1% to RS114,692 billion, while income per Inhabitants rose by 9.7% to $ 1,824.
- Inflation eased sharply with headline CPI to 0.3% in April 2025 against 17.3% last year. Average inflation during Christmas – APR FY25 accounted for 4.7%, down from 26.0% in the same period last year.
- The ratio of investment and GDP improved to 13.8%and the relationship between hiding-to-BNP increased to 14.1%.
- Agriculture published a modest growth of 0.56% in FY25, led by an increase of 4.72% in livestock. However, large crops fell by 13.49% due to lower cultivation and weather forecasts.
- The industry is expanded by 4.77%, supported by small manufacture and slaughter. Large -scale manufacture contracted with 1.5% in the middle of high costs and supply restrictions.
- Services increased by 2.91% and retained the largest proportion of GDP of 58.4%, supported by constant growth in retail, transport and public services.
- Pakistan recorded a fiscal profits of RS1,896 billion (1.7% of GDP) in 1qfy25, the first in 24 years. FY25 tax deficit was narrowed to 2.6% of GDP, while the primary surplus reached 3.0%.
- The policy rate was reduced to 11% in May 2025 from a highlight of 22%, reflecting declining inflation and lower energy and food prices.
- Wide money (m2) grew by 4.5% (PKR 1,604 billion) during Christmas – Mars FY25, down from 7.2% growth the year before.
- Loans in the private sector rose to RS767.6 billion during Christmas – Mar FY25, almost triple last year’s level. Consumer financing also gained a strong amount of net increase of RS71.4 billion.
- The KSE-100 index increased 50.2%and closed at 117,807 points in March 2025, increased by stable macroeconomics, business earnings and the IMF program’s progress.
- The ongoing account issued a $ 1.9 billion profit during Christmas – APR FY25, turning last year’s $ 1.3 billion deficit. Currency reserves rose to $ 16.64 billion in May 2025.
- Transfers hit a historic monthly height of $ 4.1 billion in March 2025 and grew 31% to $ 31.2 billion during July – April FY25.
- Public debt amounted to RS76,007 billion in late March 2025 with domestic debt to RS51,518 billion and external debt to R24,489 billion ($ 87 billion).
- The government reduced the short-term debt by withdrawing RS2.4 trillion in government bonds and introducing new instruments such as a 2-year zero coupon Pakistan investment bond and a 1-month Treasury.
- Strategic responsibility management operations included repurchase of RS1 trillion in state securities through repurchases and stock exchanges.
- Pakistan issued his first green sukuk to a value of RS30 billion, signaling progress towards the green economy and sustainable investments.
- The government secured $ 1.4 billion under the IMF RSF to increase climate’s resilience and institutionalized a climate event within its management framework.
Outlook
- Real GDP growth is expected to grow by potential in FY26, with the medium-term term expected at 5.7%, supported by macroeconomic stability, pro-growth shapes and uraan Pakistan’s transformation strategy.
- Inflation is expected to remain anchored by 5-7% in the medium term, supported by global disinflation, light energy prices and improved domestic food production.
- The ongoing account deficit is projected to a sustainable 0.8% of GDP in the medium term, aided by moderation of energy imports, it exports growth and qualified labor markets from the Gulf States.
- The government’s focus on export diversification, regional trade relations and value chain integration is the key to mitigating external shocks.
- Financial policy consolidation is underway through the expansion of the tax base, energy sector reforms and privatization, strengthening long -term fiscal health.
- The ongoing IMF EFF & RSF Support improves the investor’s confidence, which facilitates public and private investment streams.
- Improving credit conditions and lower inflation supports a cautious optimistic prospect of large -scale production of manufacture of manufacture, conditional on continued macrostability and structural reforms.
- Lowering global trade, rising risk premiums and tighter immigration in host countries can affect exports, transfers and investment mood.
- Potential return migration and global job market tightening require stronger domestic labor absorption strategies.
