‘Hard-earned’ economic stability to continue on back of remittances, exports: finance ministry
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People look at handbags on display outside shops in a market, ahead of Eid al-Fitr celebrations in Karachi, Pakistan April 19, 2023. — Reuters
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ISLAMABAD: The Ministry of Finance said on Friday that the country’s economy has shown continuous positive progress during the first five months of the current financial year, expressing hope that remittances and exports will remain stable due to reasonable imports. will remain .
“Macroeconomic fundamentals have strengthened, indicated by stable food prices along with further declines in CPI inflation, effective fiscal consolidation resulting in fiscal surpluses, current account surpluses in exports and remittances, and a There is an accommodative monetary policy stance,” the finance ministry said. In its monthly economic report.
According to the report, these developments have boosted business and consumer confidence, reflected in the growth of prime loans to the private sector and the rally in the Pakistan Stock Exchange. He added that prudent fiscal management and strategic reforms are paving the way for sustainable economic growth.
Efforts are on to ensure the agriculture sector achieves self-sufficiency for Rabi 2024-25 as the government has set a wheat production target of 27.920 million tonnes from an area of 9.262 million hectares, the report added.
To achieve this goal, concerted efforts were underway to ensure timely availability of essential agricultural inputs including agricultural credit, quality seeds, fertilizers, and mechanization support.
Meanwhile, agricultural credit disbursements during the July-November fiscal year 2025 reached Rs 925.7 billion, up 8.5 percent from Rs 853.0 billion during the same period last year.
Large-scale manufacturing (LSM) recorded a modest year-on-year (YoY) growth of 0.02 percent in October 2024, indicating a positive turnaround from a significant contraction of 5.79 percent observed in October 2023, the report said. A gradual recovery in economic activity amid ongoing challenges.
The auto industry performed well during July-November 2025, as production and sales of all vehicles increased by 25.2% and 24.8%, respectively.
Inflation and taxes
Meanwhile, Consumer Price Index (CPI) inflation was recorded at 4.9 percent on annual basis in November 2024 as against 7.2 percent in the previous month and 29.2 percent in November 2023.
Giving an update on revenue, the report said that FBR’s tax collection increased by 23.3 percent to Rs 4,295 billion during July-November FY 2025 from Rs 3,485 billion last year. Overall, direct taxes increased by 27 percent, sales tax by 23.6 percent, FED by 25.1 percent and customs duty by 8.0 percent.
According to Federal Fiscal Operations July-October 2025, the net federal revenues increased by 71.8 percent to Rs 4,822 billion. This growth was mainly due to a sharp increase in non-tax receipts, which increased by 101.2 percent to Rs 3,192 billion. Similarly, tax collection increased to Rs 3,443 billion as against Rs 2,748 billion last year.
Careful cost management helped keep expenditure growth to 20.6 percent against high revenue growth. In total, the total expenditure reached to 4472 billion rupees compared to 3707 billion rupees last year.
As a result, the fiscal balance stood at a surplus of Rs 495 billion (0.4% of GDP) compared to a deficit of Rs 862 billion (-0.8%) last year. Similarly, the primary surplus increased to Rs 3,124 billion (3.0% of GDP) from Rs 1,430 billion (1.4% of GDP) in the previous year.
Despite the increase in imports, the external account position has improved significantly due to a significant increase in exports and remittances.
Current Account and Exports
During the July-November fiscal year 2025, the current account posted a surplus of $944 million, compared to a deficit of $1,676 million last year. In November 2024 alone, the current account recorded a surplus of $729 million, compared to a deficit of $148 million in November 2023. It represents the fourth consecutive monthly surplus after a $346 million surplus in October 2024.
Exports of goods increased by 7.4% during the July-November fiscal year 2025, reaching $13.3 billion over the previous year, while imports were recorded at $23.0 billion, up from $21.2 billion last year (an increase of 8.3%). were recorded compared to This resulted in a goods trade deficit of $9.7 billion, reflecting a slight increase from $8.8 billion last year, while maintaining overall trade momentum.
Meanwhile, during November 2024, the Bureau of Immigration and Overseas Employment registered 60,492 workers for employment, compared to 77,316 in October 2024 and 81,427 in November 2023. 994 million in interest-free loans.
On future prospects, the report said that in order to achieve the FY 2025 target and sustain economic recovery, the government will focus on achieving crop production targets while facilitating farmers to achieve desired production levels. is aware of.
However, weather conditions can pose challenges, as below-normal rainfall can lead to water stress during the critical emergence phase of rabi crops such as wheat and barley, especially in rain-fed agricultural areas.
Industrial Front
On the industrial front, despite challenges in some sectors that remain in negative territory, the resilience of the economy is illustrated by the strong performance of high-weighted sectors, which lead the LSM in October.
Additionally, further easing of monetary policy in December is expected to stimulate economic activity.
Growing demand for credit, especially from the private sector, is a positive indicator of growing confidence in the economy. This momentum is set to accelerate, fueling higher production levels and better economic output in the coming months.
Outer Front
On the external front, remittances and exports are expected to maintain the hard-earned stability on the back of decent imports.
Complementing this will be exchange rate stabilization and inflation – expected to remain in the 4.0-5.0% range for December 2024.
Additionally, due to better fiscal performance, higher revenues and prudent expenditure management during July-October, it is expected to create fiscal space for development expenditure and support sustainable economic growth in the future.
