The Government of Pakistan officially unveiled the Economic Survey 2024-25 on Monday, offering a comprehensive look at the country’s macroeconomic trajectory, key fiscal indicators, and future policy directions. The document, presented by Finance Minister Muhammad Aurangzeb, a former banking executive, emphasized a cautiously optimistic outlook amid global economic uncertainties and domestic challenges.
Pakistan reported a GDP growth rate of 2.7 percent for the outgoing fiscal year, falling short of the government’s target of 3.6 percent. However, this marks an improvement from the previous year’s contraction of -0.2 percent and a modest recovery of 2.5 percent in FY2024. The finance minister termed this a “gradual recovery” and highlighted it as a more sustainable alternative to previous cycles of economic volatility.
Aurangzeb set the domestic growth figures within the context of slowing global growth, which dropped from 3.5 percent in 2023 to 3.3 percent in 2024, with forecasts suggesting a further dip to 2.8 percent. He stressed the importance of avoiding another “boom-and-bust” cycle, framing the current trajectory as part of a longer-term stabilisation effort.
In a major policy shift, the State Bank of Pakistan reduced its policy rate from a record high of 22 percent to 11 percent. This move is expected to save the government around Rs. 800 billion in debt servicing. The public debt-to-GDP ratio also declined from 68 percent to 65 percent, while foreign exchange reserves rose to $9.4 billion, a significant increase from the precarious levels seen in 2023.
The survey credited restored IMF support, particularly through the Stand-by Arrangement, as a sign of regained credibility under Prime Minister Shehbaz Sharif’s leadership. Negotiations are now underway for an Extended Fund Facility aimed at securing long-term macroeconomic stability.
On the revenue side, the government recorded a five-year high in the tax-to-GDP ratio, boosted by 26 percent revenue growth. This was driven largely by digital invoicing, AI-led audits, and faceless customs procedures. The number of individual tax filers doubled to 3.7 million, and high-value filers grew by 178 percent.
Aurangzeb also outlined energy sector reforms, including improved recoveries and tariff rationalisation. The appointment of professional boards to power distribution companies and plans to resolve the Rs. 1.275 trillion circular debt through the privatisation of 24 state-owned enterprises were also highlighted.
In terms of debt strategy, the government repaid Rs. 1 trillion in domestic debt while extending the average maturity by 66 percent. This move aims to reduce refinancing risk and shift banks’ focus towards private sector lending.
The industrial sector showed a positive rebound, registering 4.8 percent growth compared to a 1.4 percent contraction last year. The construction sector grew by 6.6 percent, with modest improvements in small-scale manufacturing. Large-scale manufacturing remained weak, though some recovery was observed in the textile and automobile industries.
Services posted 2.9 percent growth, up from 2.2 percent in the previous year. Information and communication services grew by 6.5 percent, while food services expanded by 4.1 percent. The transport sector also improved, reflecting increased port and airline usage.
Agriculture, however, remained sluggish with only 0.6 percent growth, pulled down by a steep 13.5 percent decline in major crops. Nevertheless, gains were recorded in livestock (4.7 percent), poultry (8.1 percent), and fruits and vegetables (4.8 percent). Aurangzeb suggested a phased withdrawal from government procurement of major crops like rice and maize, along with potential dismantling of Passco, and highlighted Punjab’s electronic warehouse initiative as a positive development.
Agricultural credit rose 16 percent, surpassing Rs. 2 trillion, with emphasis on mechanisation and advanced seed technologies.
The external sector saw a turnaround, posting a $1.9 billion current account surplus from July 2024 to April 2025, in contrast to a $1.3 billion deficit during the same period last year. Exports rose 7 percent, led by the IT sector and freelancers who contributed nearly $400 million. Imports increased 12 percent, primarily due to machinery and transport equipment.
Remittances surged by 31 percent year-on-year, with March recording an all-time high of $4.1 billion. Full-year inflows are expected to reach $37–38 billion. The Roshan Digital Account continued to expand, crossing the $10 billion mark with over 814,000 accounts opened.
Looking ahead, the National Economic Council has approved a 4.2 percent GDP growth target for FY2025-26. A total of Rs. 3.483 trillion has been allocated for public sector development, with Rs. 1.1 trillion from federal and Rs. 2.383 trillion from provincial budgets.
The federal budget for FY2025-26 is set to be presented on Tuesday, following multiple rescheduling delays. The Economic Survey sets the groundwork for fiscal policy deliberations and development priorities in the year ahead.