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Finance Minister Finance Minister Mohammad Aurangzeb recently claimed that Pakistan was well kept for the International Monetary Fund Program. The first review of its 7 billion dollars 37 -month bailout package is currently underway [March 4-14]. The minister highlighted economic stability as a key success of his government. Mohammad Aurangzeb has expressed confidence that the country will meet the goals set by the IMF. It can unlock constant financial support to support economic recovery, he said.
Prime Minister Shahbaz Sharif has also claimed significant progress in strengthening the economy, stabilizing structural reforms and strategic alliance with international financial institutions. Deputy Prime Minister-Saha-Foreign Minister Mohammad Ishaq Dar has set the government’s expensive goals, which has called for flexibility and economic reforms, presenting Pakistan’s involvement in G20 by 2030.
In the fiscal year 2024, the total domestic products increased by 2.5 %, which was recovered by 0.2 % in the financial year 2023. The stock exchange withdrew increased by 71 % significantly and the current account reached its highest level in additional 20 years.
According to official statistics, the price of consumers (CPI) declined 1.5 % in February 2025, down from 2.4 % in January to 1.5 %, which declined significantly by 23.1 % in the same month last year. Despite this reduction, high energy costs have been a cause for concern. Electricity and gas prices have increased by 63.6 %, which affects domestic costs and industrial costs.
The World Bank’s latest Pakistan Development Update highlights the suppressing economic challenges, especially in the power sector where circular debt has increased. Financial burden is increasing in government distribution companies. The disadvantages of transmission and distribution are high.
Despite the increase in production capacity, the collection of revenue is insufficient. The government is adhering to privatization strategies and policy measures to enhance operational performance and financial stability. Essential for the power sector reform, reduction of transmission losses and improved billing, long -term stability are essential.
The fiscal deficit was reduced to 6.8 percent of GDP and tax revenue increased by 26 percent. The government has focused on expanding the tax base and improving the method of collecting. Petroleum levy and direct taxes have played a significant role in increasing taxes. However, the proportion of GDP from tax is lower than the regional average, which requires more financial reforms. It aims to increase tax revenue by 13.5 % of GDP in the next four years. It should have been 18 % in view of population growth and other strange financial challenges, especially monster loans.
Foreign exchange reserves increased by $ 10.6 billion, which is equal to 1.9 months of imports. This improvement reflects the impact of financial stability efforts, reducing trade deficit and the impact of the influx of international financial institutions. Despite these benefits, external risks with excessive lending costs and dependence on external financing remain. The government wants direct investment to strengthen economic flexibility.
Financial policy adjustments have played a key role in stabilizing inflation, which has been more than last year. The State Bank of Pakistan has maintained a cautious stance by implementing measures to control inflation while supporting economic growth. The exchange rate has been strengthened, which helps prevent imported inflation and improve investors’ confidence. However, inflation is underway due to energy prices and disturbances in the supply chain.
Signs of improvement in Pakistan’s foreign trade position have been shown, exports increased by 11.6 % in fiscal year 2024, which is primarily driven by the agriculture sector. The ban on Indian rice exports created an opportunity for Pakistani rice exporters, causing a record high food export income to $ 7.1 billion. However, the import growth has been modest at 0.9 %, which reflects the strict rules and regulations of suppressed domestic demand and imports. The balance of payments has improved, which helps in overall economic stability.
Pakistan’s economic point of view is cautiously. Growth is likely to reach 2.8 % in fiscal year 2025. The implementation of structural reforms, financial discipline and policy will be necessary to achieve long -term economic stability.
The industrial sector faced challenges, a 1.2 % contract was signed due to the reduction of production and manufacturing in manufacturing. However, the agriculture sector has experienced its highest growth in 19 years, which increased by 6.4 %, which is driven by the increasing production of wheat, rice and cotton. The services sector also increased by 2.2 %, which improves retail trade and consumer costs. The purpose of the government is to encourage investment and increase industrial productivity by reducing regulatory barriers.
Structural reforms in public -owned businesses (SOE) have been identified as an important area for economic progress. The SOE has created a financial imbalance due to incompetence, which has indicated the government to improve privatization and governance. The reorganization of these organizations is focused on reducing operational losses and increasing service supply. The introduction of performance -based administration and accountability procedures is to improve financial stability.
The government has also emphasized on social welfare programs to reduce the impact of economic challenges on weak populations. The allocation of the Benazir Income Support Program has been increased, but inflation is inadequate. The increasing cost of living has put the domestic budget in stress, which requires more policy intervention to help low income groups.
Investing in human capital is essential for sustainable economic growth. The education sector faces important challenges with one -third of children outside school. In order to enhance the production of manpower, public spending on education and expertise development is essential. Improving the health sector is also important, as poor health care affects economic participation and productivity.
Pakistan’s digital economy offers a great opportunity for economic change. Information and Communication Technology (ICT) sector has shown flexibility, which has increased exports of economic growth. The government is preferring digital infrastructure investment to support innovation and business capabilities. Strengthening cybersecurity and regulatory framework will be important to promote the competitive digital economy.
The energy sector reforms remain a priority, as rising costs and incompetence also burden the business as well as the business. The circular loan of the power sector has reached an unstable level, which requires immediate reforms. The government is pursuing measures to improve revenue collection, increase grid performance and promote renewable energy sources. Energy distribution companies must strengthen governance in energy distribution companies to reduce financial losses and ensure reliable power supply.
Increasing agricultural productivity is the key to ensuring food safety and economic stability. Climate change and water shortage poses important risks to agricultural production. In order to maintain agricultural growth, investment in modern farming techniques, irrigation infrastructure and climate crops is important. The government is also working on policies to help farmers on a small scale and improve market access for agricultural products.
The financial sector has an important role in economic stability. The banking industry is strong, which has a better proportion and liquidity in large quantities of the capital. However, credit to the private sector is low. Banks are highly exposed to government loans. Strengthening financial inclusion, supporting small and medium -sized businesses (SMEs) and enhancing digital banking services is essential for more dynamic financial systems.
Pakistan’s economic outlook is cautiously, which is likely to reach 2.8 % in fiscal year 2025. The implementation of structural reforms, financial discipline and policy will be necessary to achieve long -term economic stability. The government’s commitment to debt reduction, revenue production and investment -friendly policies will create economic pace in the coming years.
Looking forward, government officials are hopeful about achieving economic stability. The Prime Minister emphasized the importance of ongoing structural reforms, strengthened his partnership with international financial institutions and attracted foreign investment. The policy will be the key to ensuring sustainable growth, transparency, transparency and regulatory performance.
The government aims to tackle economic challenges through target intervention, focusing on infrastructure development, energy reform and improvement in the financial sector. Creating economic flexibility demands integrated efforts in all sectors, which focuses on governance, performance and strategic investment. The constant commitment to reforms ensures the prosperous future of its citizens, in positions to become a strong and stable economy.
The author and lawyer of the Supreme Court, Dr. Ikramol Haq, is an affiliated teacher in the Lahore University of Management Sciences.
Abdul Rauf Shakuri is a corporate lawyer based in the United States
