As part of our annual tradition, we are pleased to share our bulletin on key insights derived from the Pakistan Economic Survey 2024–25 and the Finance Act 2025. This year’s edition highlights pivotal economic shifts and includes our commentary.
The economic landscape in 2024–25 reflects a period of tentative recovery. With GDP growth reaching 2.7%, modestly up from last year’s 2.5% yet below the 3.6% target, the economy is steadily emerging from crisis. Inflation has impressively dropped to 4.6–4.7%, marking a six-decade low, while the central bank’s benchmark rate was reduced to 11%, down from a peak of 22%. A historic primary surplus of approximately 3% of GDP signals improved fiscal discipline.
Despite these positive signs, underlying challenges persist. The agriculture sector—accounting for 24% of GDP—grew a modest 0.56%, yet flagship crop production fell sharply by 13.5%, indicating structural vulnerabilities. While industry rebounded with around 4.8% growth, services advanced by 2.9%, with both sectors under pressure.
On the bright side, per‑capita income rose nearly 9.8% to USD 1,824, and the current account posted a surplus of USD 1.9 billion (July‑April), reversing last year’s deficit. Foreign exchange reserves have slowly strengthened, and private investment grew 9.9%, underscoring renewed confidence.
Yet, external imbalances remain concerning. Pakistan’s external debt has reached USD 87.4 billion, with debt servicing consuming approximately 1.9% of GDP.
In light of these mixed signals, the Finance Act 2025 seeks to cement gains in macroeconomic stability—balancing tax reform, fiscal restraint, and targeted development. However, the decline in agricultural output, combined with high debt servicing, highlights the need for calibrated support to vulnerable sectors and a renewed focus on structural reform.
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