Economic Survey FY25: With 4.6% inflation, govt falls short of growth target

#Economic #Survey #FY25 #inflation #govt #falls #short #growth #target

ISLAMABAD: During the disclosure of Pakistan Economic Survey 2024-25, Federal Finance Minister Mohammad Aurangzeb said that during the outgoing financial year, 2.7 percent of GDP growth was seen in the country.

The government initially targeted a 3.6 percent increase in total domestic products for this financial year, but it reduced it by 2.7 percent last month. The International Monetary Fund is expected to increase by 2.6 % in this financial year and the next 3.6 %.

The survey has significant importance before the annual federal budget-which will be presented tomorrow (Tuesday) about GDP growth, tax revenue, positions of various industries and other major financial and economic indicators in the outgoing financial year about the country’s socio-economic performance in the financial year.

These include the impact of inflation, trade and balance balance, public debt, population growth, employment levels and climate change. The stable ideology of these indicators, the survey aims to inform about public debate and policy planning in relation to the new fiscal year.

Despite the key figures, the finances highlighted a major reduction in policy rates from 22 % to 11 % and remarked that the reforms are recovered in the power sector.

Saying that Pakistan’s exports faced a 7 % increase, Aurangzeb highlighted the country’s growing information technology (IT) capability and said that freelancers earned up to $ 400 million during the outgoing financial year, while IT exports were $ 2.8 billion.

He added that with an increase of 11.7 % of imports, the current account deficit, he added, adding that the tax collection increased by 26 % as well as $ 1.9 billion (July to April).

On the important issue of remittances-which is a very important source of foreign exchange, the federal minister said he has seen an increase of about $ 10 billion in two years.

In connection with the government’s ongoing efforts to increase the tax net, the Finance Minister said that the number of individual tax filers has doubled in the outgoing financial year.

However, expressing regret over the shock in the agricultural sector, Aurangzeb revealed that the country’s key crops had a significant success and saw a negative growth of 13.49 %, where cotton production faced 30 % less production. Wheat production has decreased by 8.9 % while sugarcane production has decreased by 3.9 %.

The other crops that have been removed include corn (-15.4 %), and rice (-1.4 %). On the contrary, the production of potatoes and onions increased by 11.5 % and 15.9 %, respectively.

Commenting on the country’s economic recovery, Finance Czar said that Islamabad has recovered GDP in comparison to global growth. Noting that the global inflation in the last two years is 6.8 percent and currently 0.3 percent, he said that the country’s foreign currency reserves have increased significantly this fiscal year.

He added, “Now we have to move towards GDP stability,” he added: “We are currently moving in a better direction”.

He said that Pakistan is permanently moving at the top with GDP growth compared to the mid -term.

Appreciating the caretaker government for keeping the country on track with regard to the International Monetary Fund (IMF) program, the Finance Minister said that reforms are necessary to replace Pakistan’s economy’s “DNA”.

He remarked, “The government made reforms to improve the performance of the Federal Board of Revenue (FBR),” he said, emphasizing that every economic change needs two to three years.

Prime Minister Shahbaz Sharif’s government is making the goal of a 4.2 percent increase between competitive priorities in the next financial year, including increasing investment, maintaining basic surplus, and management of defense spending between India.

Finance Minister Aurangzeb said he did not want the economy to spread rapidly, which has increased imports in the past.

Aurangzeb said, “Don’t fall into the sugar rush.” He told a press conference, “Because when we go under the consumption of consumption, and our imports are heavy, our balance of payments intensifies, such a whole debate goes off the tracks.”

For the financial year 2025, massive manufacturing was halted by decreasing production and decrease in large crops. The growth rate of 0.6 % in the agricultural sector was the lowest in nine years, which has been affected by the negative weather.

A local brokerage, a topline securities, said that the 2.7 percent increase in fiscal year 2025 is less than 4.7 percent of Pakistan’s long -term average, and it is likely that it will be revised due to hopeful assumptions on industrial production.

The total income of the government for the first three constituencies of the financial year 2025 was Rs 13.37 trillion, the survey states that 36.7 percent higher than last year.

It showed that Pakistan had an additional $ 1.9 billion in nine months in the same period a year ago, compared to a loss of 200 million in the same period in nine months.

To encourage growth, the central bank has reduced its policy rate by more than 1,000 basis points in this financial year. Last month, its latest deduction brought the key rate to 11 %, which resumed a softening cycle, which reduced the rate by 22 % after a break in March.

Aurangzeb said that easy credit conditions reinforced economic recovery.

In the first three constituencies of the financial year, the fiscal deficit was 2.6 % of GDP. Inflation was viewed 4.6 percent for the year.

This refreshment has come when Pakistan’s economy is becoming stable but it is critical as the country goes on reforms under the $ 7 billion IMF program.

Freight

In financial terms, the total revenue increased by 36.7 % to Rs 13,367.0 billion during July -March 2025. The tax revenue increased by 26.3 % to Rs 9,300.2 billion, and non -tax revenue increased by 68 % to Rs 4,229.7 billion. The FBR tax collection also similar to the total tax data, which is also Rs 9,300.2 billion. The fiscal deficit was 2.6 % of GDP, while the basic balance made an additional amount of Rs 3,468.7 billion, which is equivalent to 3.0 % of GDP.

Remittances

Meanwhile, between July 2024 and April 2025, Pakistan was subjected to a total of $ 31.2 billion remittances, which increased the record recorded from $ 23.8 billion to 31 % annually during the same period in the same period in FY 2024. The rise in remittances was an important role in supporting the country’s $ 1.9 billion current account surplus.

Inflation

On the financial front, the average of CPI inflation was 4.7 percent during the July-April-April 2015, the inflation of April 2025 declined by 0.3 percent, the lowest thing in the decade. Although the basic inflation data was not clearly stated, the State Bank of Pakistan has reduced the policy rate by 1,100 twenty points since June 2024 in response to lowering prices pressure. Kabur also decreased by 11.3 %.

Agriculture

In the financial year 2025, Pakistan’s agriculture sector recorded a slight growth of 0.56 %. Within this sector, the major crops have decreased by 13.49 %, while cotton ginning has decreased by 19.03 %. On the contrary, cattle performed strongly with a 4.72 % increase, and other crops increased by 4.78 %.

The crops that have been removed include corn (-15.4 %), and rice (-1.4 %). On the contrary, the production of potatoes and onions increased by 11.5 % and 15.9 %, respectively.

Industrial sector

The industrial sector increased 4.77 % in fiscal year 2025. However, the performance varies in the sub -sections: mining and excavation decreases 3.38 %, and large -scale manufacturing (LSM) contract 1.53 %. On the positive side, electricity, gas and water supply increased by 28.88 %, while construction has a growth rate of 6.61 %.

Service Department

During the financial year 2025, the services sector increased 2.91 %, with components mixed trends. Wholesale and retail trade saw a minimum growth of 0.14 %, while transport and storage increased 2.20 %. Finance and insurance subsickers increased by 3.22 %, the general government’s services increased by 9.92 %, and other private services increased 3.64 %.

Outer sector

The external sector showed encouraging symptoms. Exports increased by 6.4 percent to $ 26.9 billion, and imports increased by 7.5 percent to $ 48.3 billion, causing the trade deficit to $ 21.3 billion. However, the current account published an additional amount of $ 1.9 billion, which is a significant change. The exchange rate has risen to $ 278.72 per US, and foreign exchange reserves have increased to $ 16.64 billion.

BISP, Social Protection

In terms of social protection, the government allocated Rs 471 billion to the Benazir Income Support Program (BISP) in FY 2025. Benazir Kafalat Initiata provided 366.9 billion to 8.5 million families, while Benazir Talisami Wazif provided Rs 55.4 billion to support the education of 7.96 million children. In addition, Benazir Nathanoma extended Rs 5.48 billion to benefit 0.7 million mothers and children.

Education

The government, led by Prime Minister Shahbaz Sharif, spent 0.8 % of GDP on the education sector between July 2024 and March 2025, the literacy rate of the country is 60.6 %, where the literacy rate of men and women was 68 % and 52.8 % respectively.

The number of universities in the country is 269, of which 160 are public and 109 are private.

A total of Rs 661.1 billion was allocated for higher education, with PhD faculty members standing 37.97 %.

Manufacturing and mining

Overall manufacturing growth increased by 1.3 % in fiscal year 2025, compared to 3.0 % last year. The economic survey states that this slowdown was primarily driven by a contraction of 1.5 % in large -scale manufacturing (LSM), compared to a slight growth of 0.9 % in the previous year.

On the contrary, small -scale manufacturing (SSM) and slaughter increased by 8.8 % and 6.3 %, respectively, which helps the sector.

Meanwhile, the mining and excavation sector faced difficulties, which contracts up to 3.4 % in fiscal year 2025. An improvement compared to the 4.0 % reduction in the previous year.

Financial development

According to the economic survey, the financial stability efforts, which began in fiscal year 2024, continued on track for the second consecutive year in the financial year, thus, according to the economic survey, financial discipline was strengthened.

Effective stability measures helped reduce the fiscal deficit by 2.6 % of GDP during July March, the last year from 3.7 % to July 2025. Similarly, the basic surplus has improved Rs.

The provinces also played a vital role in supporting the federal government’s financial stability efforts by posting a significant overall amount of Rs 1,053.3 billion during the financial year 2025 during July last year.

– with additional input from Reuters