Economic Survey 2024-25: Pakistan misses growth target

Pakistan missed its GDP growth target of 3.6% in the outgoing fiscal year, posting a figure of 2.7%, revealed the Economic Survey 2024-25 unveiled by Finance Minister Muhammad Aurangzeb, former CEO and president of one of the country’s largest banks, on Monday.

According to the provisional figures provided by the survey, Pakistan’s agriculture sector, industries and services sector registered subdued growth of 0.56%, 4.77% and 2.91%, respectively, during the outgoing fiscal year.

Commenting on the global economy, Aurangzeb noted that the global GDP growth in 2023 stood at 3.5%, which was reduced to 3.3% in 2024 and is now projected to be 2.8% according to the latest estimates.

“GDP growth in 2023 stood at -0.2%, which grew to 2.5% in FY24. We announce a 2.7% GDP growth for FY25,” said Aurangzeb.

The finance minister termed it a gradual recovery. “From my perspective, it is the right way to go in terms of sustainable growth,” he said.

The finance czar was of the view that the last thing the government want is “to go into another round of a boom and bust cycle”.

Aurangzeb shared that Pakistan’s CPI inflation reading, which crossed 29% in 2023, has dwindled to 4.6%. “I think we have moved in the right direction.”

“Pakistan’s debt-to-GDP ratio has reduced from 68% to 65%,” he said.

He reiterated that Pakistan needs to fundamentally change its economic DNA, for which structural reforms are vital.

“The tax-to-GDP ratio has hit a five-year high,” Aurangzeb shared.

On energy sector reforms, Auranzgeb said that the resolution of Rs1.27 trillion circular debt inked with banks will play a crucial role going forward.

He added that the privatisation process will go forward in the upcoming financial year with a “renewed vigour and energy”.

Massive savings on debt servicing

On public finance, Aurangzeb shared that debt servicing is “the single largest expense item for the government”.

“Due to a decline in the policy rate, the government has managed to save debt servicing cost of around Rs800 billion to Rs1 trillion,” he said.

Talking about Pakistan’s external sector, Aurangzeb shared that during the outgoing fiscal year (July to April FY25), the country posted a current account surplus of $1.9 billion, compared to $1.3 billion deficit last year.

“We are optimistic that the government will end this fiscal on a surplus,” he said.

The survey serves as a crucial document ahead of the annual federal budget, offering detailed insights into the country’s socio-economic performance over the outgoing fiscal year.

The government will announce the budget for the financial year 2025-26 on Tuesday.

The earlier dates for the Economic Survey 2024-25 and budget announcement for FY26 were June 1 and June 2, respectively.

However, the government extended the dates to June 9 and June 10.

The National Economic Council (NEC) on Wednesday approved a gross domestic product (GDP) growth rate of 2.7% for the outgoing fiscal year and a projected growth rate of 4.2% for the next financial year.

The NEC was informed that Rs3.483 trillion was being spent on the annual national development, of which Rs1.100 trillion was the share of the federation and Rs2.383 trillion was the share of provinces.

The meeting was told that remittances increased by 30.9% from July 2024 to April 2025, and the current account balance remained positive for the first time.

The fiscal deficit in the fiscal year 2024-25 further decreased to 2.6% of the GDP, while the primary balance remained 3% of the GDP.

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