24/04/2025
Pakistan's financial situation
Economic Performance Overview
GDP Growth: The economy grew by 2.38% in FY2023-24, reversing a contraction of 0.21% in the previous year. This growth was primarily driven by a 6.25% expansion in the agriculture sector, the highest in 19 years, due to substantial increases in wheat, rice, and cotton production.
Islamabad Scene
Industrial and Services Sectors: The industrial sector experienced a modest growth of 1.21%, while the services sector grew by 1.21%, indicating a slow recovery in these areas.
WE News English
Inflation and Monetary Policy: Inflation averaged 24.5% during July-May FY2024, down from 29.2% in the previous year. The State Bank of Pakistan maintained a tight monetary policy with a policy rate of 22% to control inflation.
Business Recorder
Fiscal and External Accounts
Fiscal Deficit and Revenue Collection: The fiscal deficit was contained at 3.7% of GDP, with total revenues growing by 41%, driven by a 30.6% increase in Federal Board of Revenue tax collection.
Islamabad Scene
Current Account Deficit: The current account deficit narrowed significantly to $0.2 billion during July-April FY2024, compared to $3.9 billion in the same period last year, reflecting improved trade balances and remittance inflows.
WE News English
International Support and Reforms
IMF Agreement: In March 2025, Pakistan reached a staff-level agreement with the International Monetary Fund (IMF) to unlock $1.3 billion under a new 28-month climate resilience loan program. This agreement also included the first review of the ongoing 37-month bailout program, facilitating access to an additional $1 billion, totaling $2 billion in disbursements.
Reuters
World Bank Partnership: The World Bank approved a $20 billion, 10-year lending package aimed at supporting economic stabilization and shielding investments from political instability. This partnership focuses on addressing key development challenges, including malnutrition, education, climate change resilience, and energy sector reforms.
Financial Times
Structural Challenges and Outlook
Investment and Savings: The investment-to-GDP ratio declined to 13.14% in FY2024 from 14.13% in FY2023, while the saving-to-GDP ratio slightly decreased to 13.0% from 13.2%. These figures indicate ongoing challenges in stimulating domestic investment and savings.
WE News English
Debt Levels: Total public debt stood at Rs67.5 trillion by end-March 2024, with domestic debt at Rs43.4 trillion and external debt at Rs24.1 trillion ($86.7 billion), highlighting the need for prudent debt management strategies.
Business Recorder
Future Projections: The government aims to achieve a 5.5% growth rate by FY2027 through policies prioritizing exports, investment, and structural reforms. However, the success of these initiatives depends on maintaining political stability, implementing effective reforms, and managing external vulnerabilities.
