ISLAMABAD: Pakistan’s economy continued growth momentum in fiscal year 2024-25, supported by strengthened macroeconomic fundamentals, prudent fiscal management, and improved external sector performance, finance ministry said in a recent report.
“Real GDP grew by 2.68 percent, while inflation eased steadily. Current account recorded a surplus of US$1.81 billion, the fiscal deficit declined, and the primary surplus reached 3.2 percent of GDP in Jul-Apr FY2025,” says monthly Economic Update and Outlook for June 2025.
According to the outlook, the ongoing International Monetary Fund (IMF) programs (EFF and RSF), along with upgraded credit ratings, bolstered policy credibility and investor’s sentiment.
“The government remains committed to structural reforms focused on tax harmonization, energy pricing, and privatization, while also advancing climate action through dedicated initiatives to lay the foundation for inclusive and sustainable growth,” it adds.
The report says, quality seeds and mechanization are expected to boost agricultural output. For the 2025–26 Kharif season, the federal government set targets of 2.2 million hectares for cotton cultivation and 10.18 million bales in production.
Farm input use is improving due to better access to quality seeds, credit, machinery, and fertilizers. From Jul–Apr FY2025, agricultural credit disbursement rose 15.7% to Rs 2,066.6 billion, nearing the Rs 2,572.3 billion annual target. Agricultural machinery imports increased 10% to $69.2 million, reflecting greater mechanization.
Meanwhile, Large Scale Manufacturing (LSM) showed a mixed performance in April 2025, registering a YoY growth of 2.3 percent while contracting by 3.2 percent month-on-month (MoM) basis. Cumulatively, LSM declined by 1.5 percent during Jul-Apr FY2025, in contrast to a marginal growth of 0.3 percent recorded in the last year
In May 2025, year on year Consumer Price Index (CPI) inflation was recorded at 3.5 percent, compared to 11.8 percent in May 2024. On Month on Month, it has declined by 0.2 percent, following a 0.8 percent decrease in April and a 3.2 percent decline in May 2024.
On fiscal side, the report adds, during Jul-Apr FY2025, the increase in revenues outpaced the growth in expenditures, showing the effectiveness of ongoing consolidation efforts.
Net federal receipts grew by 44.4 percent to Rs 8,124.2 billion during Jul-Apr FY2025 from Rs 5,627.5 billion last year. The rise in revenues is primarily contributed by 68.1 percent growth in non-tax collections. Similarly, tax collection witnessed a significant increase, as in Jul-May FY2025, it grew by 25.9 percent to Rs 10,233.9 billion from Rs 8,125.7 billion last year.
The external account position continued to improve during Jul-May FY2025 on account of rising remittances and exports. The current account posted a $1.8 billion surplus, reversing the deficit of $1.6 billion last year. Goods exports rose 4.0 percent to $29.7 billion, while imports increased 11.5 percent to $54.1 billion, widening the trade deficit to $24.4 billion from $20.0 billion last year.
Remittances reached $34.9 billion, up 28.8 percent from $27.1 billion, led by inflows from Saudi Arabia (24.4% share) and UAE (20.4%). Net FDI recorded at $2.0 billion compared to $2.1 billion last year. In May 2025, the Bureau of Emigration & Overseas Employment registered 59,995 workers, a 12.7 percent increase from 53,231 in April.
The Pakistan Poverty Alleviation Fund, in partnership with 24 organizations, disbursed 18,525 interest-free loans worth Rs 894 million in May 2025. Since 2019, a total of 3.01 million loans amounting to Rs 117.61 billion have been provided. During Jul-April FY2025, Rs 411.56 billion was spent under the BISP, representing a 29 percent increase compared to last year, against an allocation of Rs 592.5 billion.
According to the report, inflation is expected to remain within the range of 3.0-4.0 percent for June 2025. The outlook for LSM in the coming months appears positive, supported by encouraging trends in high-frequency indicators such as cement dispatches and automobile sales.
The uptake in loans to private sector businesses suggests rising production activities and improved investor confidence. On the external front, higher remittances and exports will continue to keep the current account in surplus for FY 2025.
