Ministry of Finance releases Economic Survey of Pakistan 2024-25

June 09, 2025 (MLN): In a major pre-budget development, the Ministry of Finance today unveiled the Economic Survey of Pakistan 2024-25, presenting a detailed review of the country's macroeconomic performance ahead of the federal budget announcement scheduled for tomorrow.

The survey, launched by Finance Minister Senator Muhammad Aurangzeb, highlights a modest economic recovery, with GDP growth clocking in at 2.7%, compared to a contraction of 0.2% in the previous fiscal year.

Although the growth rate missed its 3.6% target, the improvement reflects stabilizing fundamentals amid a challenging global environment.

Speaking at the press conference, the finance minister said, “We are witnessing the early signs of recovery. The focus now is on ensuring sustainable, non-volatile growth and avoiding the historical cycles of boom and bust.”

One of the standout achievements of FY24-25 has been the substantial rise in workers’ remittances, which jumped 30.9% between July 2024 and April 2025.

This surge helped push Pakistan’s current account into surplus for the first time in several years, offering much-needed external sector relief.

On the fiscal front, the fiscal deficit narrowed to 2.6% of GDP, while the primary surplus reached 3%, reflecting improved revenue collection and expenditure control.

Inflation, which had hovered near 29% last year, dropped sharply to 4.6%, allowing the State Bank of Pakistan to reduce its policy rate to 11%.

Private sector credit also witnessed a strong rebound, with commercial banks disbursing Rs681 billion in loans during the July-May period.

The Annual National Development Programme (ANDP) for FY25 amounted to Rs3.483 trillion, including a federal share of Rs1.1 trillion and a provincial allocation of Rs2.383 trillion.

The survey also offers insights into key sectors such as agriculture, industry, services, energy, telecom, health, education, and infrastructure, while addressing issues related to climate resilience and social protection.

The Economic Survey sets the tone for the FY2025-26 budget, which is expected to focus on continued fiscal consolidation, development spending, and reforms aligned with Pakistan’s commitments under the IMF program.

With global growth slowing to 2.8%, the finance minister emphasised that Pakistan’s economy is now positioned for a more stable path forward. “The groundwork is being laid for inclusive and long-term growth,” he added.

Building on the recovery that started in FY 2024, the economy maintained its upward trajectory in FY 2025, recording a 2.68% annual growth.

This progress is underpinned by effective macroeconomic management, improved fiscal and external account balances, and a significant reduction in inflation.

Implementing a 37-month, US$ 7 billion IMF Extended Fund Facility (IMFEFF) has bolstered policy credibility and provided essential financial support to promote inclusive and reform-driven growth. Inflation has experienced a significant reduction, decreasing from 20.7% in April 2024 to a near-zero (0.3%) in April 2025.

The average inflation rate for July through April in FY 2025 was recorded at 4.7%, in stark contrast to the 26.0% observed during the previous year.

This decline can be attributed to several factors including fiscal consolidation, a stringent monetary policy, targeted relief measures, and efforts to stabilize the exchange rate.

Despite persistent supply-side constraints, growth prospects have significantly improved. Investor confidence has notably increased, as demonstrated by a 27.5% rise in company incorporations.

Additionally, fiscal discipline has shown marked enhancement during July-March FY 2025: the fiscal deficit has contracted to 2.6% of GDP from 3.7 percent last year, the primary surplus has risen to 3% from 1.5% and tax revenues have surged by 26.3%, totaling Rs 9.3 trillion (July-April FY 2025).

On the external front, there has been a remarkable reversal in the current account, shifting from a US$ 1.3 billion deficit to a US$ 1.9 billion surplus, a change attributed to improved export performance and record remittance inflows.

The IMF-EFF, alongside around US$ 1.4 billion disbursement under the Resilience and Sustainability Facility (RSF), and improved credit ratings from Moody’s and Fitch, reflect growing international recognition of Pakistan’s reform momentum.

Strengthened macroeconomic fundamentals have enabled the State Bank of Pakistan to lower the policy rate, supporting private sector credit growth and spurring economic activity.

Continued remittance inflows offer a vital buffer for the external account and help sustain household consumption, with further upside potential through skills development and greater diversification of overseas labour markets.

Sustaining the recent developments in Pakistan's growth necessitates the resolution of ongoing structural challenges.

The country’s youthful demographic presents a significant opportunity but also highlights the urgent need for comprehensive reforms in education, technical and vocational training, and job creation.

This is particularly crucial in labor-intensive sectors such as agriculture, construction, and manufacturing. A concentrated effort to mitigate regional disparities and to empower small and mediumsized enterprises and entrepreneurs is vital for promoting inclusive economic growth.

The digital economy presents a transformative opportunity for growth and development. Pakistan's information technology exports have significantly benefited from a young, highly skilled workforce and competitive cost structures.

Nevertheless, the growth of this sector faces limitations due to deficiencies in digital infrastructure, inconsistent regulatory environments, and insufficient investment in digital skills development.

Addressing the digital divide, particularly among women and rural communities, will be essential for unlocking the full potential of this sector.

In conclusion, Pakistan finds itself at a crucial crossroads. The foundational elements for economic recovery are becoming increasingly robust, and investor confidence is re-emerging.

However, sustaining this positive momentum necessitates transitioning from short-term stabilization measures to comprehensive structural reforms.

Through disciplined implementation of policy and strategic guidance anchored in a long-term vision, URAAN Pakistan, which emphasizes export-led and investmentdriven growth, has the potential to cultivate a resilient, inclusive, and prosperous economic future.