smartcybers786@gmail.com 
#Budget #optics #test #economy #Political #Economy
Finance Minister Haram Shehzad recently pointed to Pakistan’s growing foreign exchange reserves, low debt to improve the import cover as a sign of strengthening GDP ratio and economic stability. These achievements are noteworthy. Nevertheless, they should weigh against the wider picture: a stable economy, shallow reforms and permanent structural risks.
Establishment
The government is seeking financial revenge: inflation has dropped to 3.5 percent. A $ 1.81 billion current account is surplus. And the basic balance of payments of 3.2 % of GDP. Foreign exchange reserves have reached about $ 17 billion, and remittances have increased the record $ 38 billion (July to June). These optics can affect some donor and classifying agencies, but the average citizen or small business has improved much less. Unemployment, unexpected, is continuing to breathe homes. The purchase power is suppressed. Despite the cooling CPI indications, the cost of living is still unbearable. The so -called surplus masks a long part of the contraction.
The economic model is alarmingly narrow. Extra production or exports were not achieved by increasing the growth, reducing imports, reducing imports and waiting for arrival. The social cost of this ‘discipline’ has been very high for the lower middle class and the informal labor force.
Growth
While the real GDP increased by 2.68 % in the financial year 2025, the quality of this growth is objectionable. During July-April, large-scale manufacturing (LSM) decreased by 1.5 %. Sending cement increased by 2.5 %, but domestic sales decreased by about 2 %. The automobile production saw a temporary increase, but due to the large number of imports and the relaxation of the shopkeeper, the industry was not restored. Construction and textiles, once the most important places of employment and exports, are still in trouble.
Exports increased by 4 % year -on -year, while imports increased by more than 11.5 %, which expanded the trade deficit. IT exports increased and remittances offered buffers, but this is not an alternative to productive industrial growth. The external sector is suffering from global commodity shocks, oil prices fluctuations and remittances.
Demands Pillow
In the financial year 2025, remittances increased by 26.6 % to $ 38.3 billion to $ 38.3 billion. These arrival provided significant support to the balance of payments and helped build foreign exchange reserves. However, they also reflect a permanent contradiction: while the money from abroad offers a macroeconomic framework, the domestic economy works in a fast and booty cycle. Inflation may be low on paper, but essential items are unbearable and pressure on urban households remains intact. The export -led industries and the LSM sector have not maintained its pace, which has failed to raise the country’s economic pace in a sustainable direction. Unless these basic engines of development will be re -eliminated, the remittances will serve as a plaster on a deep structural wound.
Tackle and inequality
The collection of federal taxes has increased impressively. FBR revenue increased by 25.9 % to Rs 10.2 trillion. Non -tax revenue increased by 68 % to Rs 4.3 trillion. However, this number hides a deep imbalance: the tax burden is still sketch. This system relies heavily on taxes, customs and petroleum levy. Agriculture, real estate and retail sectors avoid fair partnerships.
Improving macro indicators means a bit when micro facts are so disappointing. We cannot afford another year of our own data points, while the economy goes for air. Pakistan needs reforms that touch the land, not only the number.
The promise of increasing the tax net is largely unusual. Already in the net – salaried workers and small formal businesses – keep the most burden. The government’s compliance with the IMF benchmark is clear, but it comes at the expense of a widespread gap between Pakistan’s taxpayer minority and its powerful elite.
Lose the opportunity.
Under the supervision of the IMF, financial hardship has developed a textbook primary surplus. Nevertheless, the government has failed to use space for meaningful structural reforms. A long -standing purpose, privatization of damaging SOs is stopped. There is no significant reduction in the circular debt of the power sector. Energy pricing, while rationally for financial goals, hurts consumers and distribution performance has not improved.
In agriculture, data shows improved seed distribution and mechanization, but ground reforms, water prices and market access are good. Subsidies benefit more than farmers. Even in digital and services, where there is a clear capacity in Pakistan, the support of the policy is scattered and reacted.
Dependent and stagnation
The story of Pakistan’s development operates externally. The economy depends on remittances abroad, loan roll over and multilateral. This year, foreign direct investment has declined by 7.6 %. With net emissions of Port 624 million, the portfolio investment has become negative. The finance team can claim credibility through credit rating upgrade, but investors’ confidence is strict.
Shehzad recently noted that Pakistan’s foreign exchange reserves increased by $ 14.5 billion from the fiscal year 2024. He emphasized that these benefits were not from loan, but through exports, IT services, investment and record remittances. The import cover is now in 2.5 months, which is more than 1.7 months last year. These are important achievements, but they raise the question: are we stabilizing our balance sheet or changing our economic engine?
If we create reservoirs without increasing productivity, we take the risk of making temporary flexibility wrong for long -term reforms. These and remittances are important buffers, but they do not replace our commercial and energy models, building wide -based industrial growth, SME empowerment or structural shifts.
The stock market rally, which is often presented as a symbol of confidence, is widely based on speculation and is driven by an institutional position in response to financial softening. The policy rate may be 11 %, but access to credit for SMEs and employment sectors is limited.
Optics and results
The economic story of Pakistan is being written in a spreadsheet, not in the roads or shop floors. Budget is a reflection of strict choices and financial indicators have improved, but unless this number translates industrial rehabilitation, export diversity and tax into a better government, the economy will be trapped in the level of stability.
The macro indicator means a bit when the micro facts are so disappointing. We cannot afford another year of our own data points, while the economy goes for air. Pakistan needs reforms that touch the land, not only the number.
Disappointment in macro -indicators means little when micro facts are so disappointing. We cannot afford another year of our own data points, while the economy goes for air. Pakistan needs reforms that touch the land, not only the number.
The author is an independent journalist based in Islamabad. He mostly reports about economy, energy and climate problems. They can be arrived at tweets/posts @Fezi22 and FPRACHA@gmail.com.
