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Financial Forecast for 2024-2025: Government fails to achieve growth objective amidst soaring remittances and controlled inflation rates

Pakistan's Economy Fails to Meet Projected GDP Growth of 3.6%, Climbs Up 2.7% Instead: Finance Minister Aurangzeb. The number of tax filers doubled during the previous fiscal year, as stated by the minster. The minister emphasized that the implemented reforms were crucial to transforming the...

Pakistan's economic growth fell short of the anticipated 3.6%, instead registering a 2.7% expand,...
Pakistan's economic growth fell short of the anticipated 3.6%, instead registering a 2.7% expand, as per the Finance Minister, Aurangzeb. Remarkably, the number of tax return filers doubled during the recently concluded financial year. Aurangzeb emphasizes that the implemented economic reforms were crucial in altering Pakistan's economic structure's fundamental composition.

Financial Forecast for 2024-2025: Government fails to achieve growth objective amidst soaring remittances and controlled inflation rates

Pakistan's Economic Survey Paints Mixed Picture

In a nutshell, Islamabad's Economic Survey 2025 discloses a combination of victories and struggles in the country's financial landscape over the recently concluded fiscal year. Here's a lowdown on the principal points highlighted in the report:

Key Economic Highlights- GDP Growth: Pakistan's GDP grew by a moderate 2.7%, missing the set target of 3.6%, but a visible improvement from last year's 2.5%.- Economic Growth: The economic size rose to an impressive $411 billion in 2025, up from $372 billion in the previous fiscal year.- Sectoral Growth: - Agriculture: Despite a rapid decline in major crops like cotton (-30.7%) and wheat (-8.9%), owing to unfavorable weather conditions, the livestock sector demonstrated remarkable resilience, growing by 4.72%. - Industry: The industrial sector expanded by 4.77%, despite a 1.53% contraction in large-scale manufacturing (LSM) due to substantial costs and constraints. - Services: The service sector witnessed a growth of 2.91%.

Remittances and Current Account- Remittances: Remittances saw a substantial surge of 30.9%, amounting to $31.2 billion in the period of July 2024 to April 2025.- Current Account: The current account presently reflects a surplus, showing a promising balance of payments and foreign exchange inflows.

Persisting Challenges and Future Scope- Growth Goals: The nation's GDP growth objective for 2025 was missed, but aims for a stronger growth rate in the upcoming fiscal year.- Agricultural Struggles: The agricultural sector battled against significant challenges like the water crisis and diminished crop yields, impacting the overall economy's growth.

In essence, while Pakistan's economy experienced difficulties in sectors like agriculture and manufacturing, vital macroeconomic indicators demonstrated improvements. The domestic economy anticipates future growth.

More Insights- Despite the overall GDP growth falling short, Pakistan missed its mark in 2024 but plans for a more robust growth rate next fiscal year.- The agriculture sector grappled with challenges such as water crises and decreased crop yields, negatively impacting overall economic growth.- The nation's economy witnessed crucial improvements in key macroeconomic indicators and holds a promising outlook for future growth.- The finance minister commended the caretaker government's efforts to keep the nation on track with the IMF program.- The government spent 0.8% of the GDP on educational resources, with 60.6% literacy rate, where male literacy stands at 68% and female literacy at 52.8%.- As of now, Pakistan has 269 universities, including 160 public and 109 private institutions.- Overall manufacturing growth slowed to 1.3% in 2025 compared to last year, largely due to a contraction of 1.5% in large-scale manufacturing.- Fiscal consolidation efforts remained effective, helping trim the fiscal deficit to 2.6% of GDP, representing a significant improvement.- The government directed Rs471 billion to the Benazir Income Support Programme, benefiting 8.5 million families.- The government spent a considerable amount on education, allocating Rs61.1 billion for higher education and having a PhD faculty member count of 37.97%.

  1. In the Economic Survey 2025, Pakistan's technology sector is conspicuous by its absence, given the report's focus on agriculture, industry, and service growth.
  2. The impact of cultural exchange programs on Pakistan's economy is not explicitly addressed in the Economic Survey 2025, though the report does highlight the importance of education as a critical aspect of economic growth.
  3. Despite the surplus in the current account, Pakistan's Finance Ministry might consider diversifying the economy to include technology and finance sectors, as these could lead to sustainable long-term growth, given the increasing importance of these fields in global business and development.

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