As Pakistan continues to navigate complex macroeconomic dynamics, a cautiously optimistic outlook is taking shape, supported by improving industrial signals, a steady external sector, and government-backed initiatives targeting key sectors like agriculture.
The government’s efforts to support agricultural productivity are gaining momentum, particularly through targeted subsidies and resource facilitation for farmers. These interventions, combined with favorable weather patterns, have contributed significantly to improved harvest prospects across the country. A robust agriculture sector remains a cornerstone for meeting national food security and export goals and is expected to positively influence overall economic activity in the months ahead.
In the industrial domain, the latest month-on-month (MoM) uptick in Large Scale Manufacturing (LSM) growth signals resilience in the sector. However, the year-on-year (YoY) decline in LSM reveals persistent structural challenges that continue to weigh on industrial output. Experts note that the mixed trends in LSM point to an economy in transition, with sector-specific constraints still needing attention despite macro-level improvements.
That said, high-frequency indicators—such as increased cement sales, rising automobile production, and a steady climb in imports—indicate growing demand and production activity. These indicators, coupled with a more accommodative monetary policy, suggest that Pakistan may be positioned for a gradual rebound in production, assuming that consumer and investor confidence remains intact.
On the inflation front, official forecasts suggest a relatively moderate outlook. Inflation is expected to stay within the range of 1.0–1.5% for March 2025 and may slightly increase to 2.0–3.0% in April. This controlled inflation trajectory provides breathing space for policymakers, businesses, and consumers alike, and aligns well with the central bank’s recent decision to maintain a stable policy rate.
The external sector is also offering encouraging signs. Exports, imports, and workers’ remittances are expected to sustain their upward trend in the near term. Seasonal factors, especially Ramzan and Eid festivities, are likely to drive a surge in remittances from overseas Pakistanis. This seasonal influx, traditionally strong during religious months, adds to the stability of foreign exchange reserves and offers crucial support to the current account balance.
Meanwhile, both exports and imports are anticipated to benefit from an ongoing expansion in domestic economic activity. This includes improved performance in manufacturing, trade, and services. With the current account deficit projected to remain within manageable limits, policymakers are optimistic about maintaining economic stability while continuing with reform and growth-oriented strategies.
Overall, while challenges remain on the industrial side, the convergence of agricultural support, export momentum, monetary easing, and inflation control sets a cautiously hopeful tone for Pakistan’s economic trajectory in the second quarter of 2025. The government’s continued focus on balancing growth and macroeconomic stability—alongside a rising digital ecosystem—positions Pakistan to potentially accelerate its recovery in the latter half of the year.