ISLAMABAD: Federal Finance Minister Muhammad Aurangzeb presented the Pakistan Economic Survey 2024-25 on Monday, revealing a 2.7 per cent growth in the country’s Gross Domestic Product (GDP) and an inflation rate of 4.6 per cent for the outgoing fiscal year.
The survey, released ahead of the federal budget to be tabled in the National Assembly on Tuesday, provides a comprehensive overview of Pakistan’s socio-economic performance. It includes key data on GDP growth, tax revenue, industrial performance, and other critical fiscal and economic indicators.
These indicators encompass inflation, trade, balance of payments, public debt, population growth, employment rates, and the effects of climate change. By providing a comprehensive overview of these factors, the survey seeks to foster public discussion and support policy planning ahead of the new fiscal year.
Consumer Price Index
Aurangzeb highlighted that the Consumer Price Index (CPI) had surged to 29 per cent in 2023 but had since dropped significantly to 4.6 per cent. He commented, “I believe we are moving in the right direction according to global standards.”
Discussing the country’s monetary policy, the finance minister reminded that the interest rate reached a record 22 per cent in 2023, but following certain measures to lower it, the key policy rate now stands at 1,100 basis points.
On macroeconomic indicators, Aurangzeb stated, “Public debt and the debt-to-GDP ratio were at 68 per cent, but have now reduced to 65 per cent.”
He also noted that as of June 30, 2024, foreign exchange reserves stood at $9.4 billion, marking a significant recovery from 2023, when reserves had fallen to just two weeks’ worth of import cover. This recovery continued after June 30 and was solidified in 2024-25.
Giving a breakup of the performance of different sectors, the finance minister pointed out that the industries grew by 4.8 per cent. Small manufacturing grew by one point three percent while the large-scale manufacturing contracted, but it remained less than the last year.
He, however, said that the auto sector went up by 40 per cent, wearing apparel eight per cent, textiles two per cent and petroleum products 4.5 per cent.
The minister said services registered growth of 2.9 per cent, information and communication 6.5 per cent, construction and real estate 3.8 per cent and food services 4.1 per cent.
“Performed extremely well”
As regards agriculture, the finance minister said it grew at point six per cent. He said livestock went up by 4.7 per cent while poultry performed extremely well by growing at eight per cent. Fisheries and forestry also registered growth. He said fruits and vegetables collectively grew by four point eight per cent.
He said that agriculture credit increased by 16 per cent, crossing over two trillion rupees. He expressed the commitment to further increase the credit in the entire supply and value chains of agriculture, emphasising that this will make a difference in the major crops.
On the external side, he said that “Our current account had a surplus of 1.9 billion dollars in the first ten months of the current fiscal year, expressing the confidence that the year will be closed on surplus”.
He said there has been an increase of seven per cent in overall exports with exports of IT standing at 3.1 billion dollars. He said overall imports increased by 11.7 per cent. The imports of machinery and transport witnessed an increase of 16.5 per cent and 26 per cent respectively, emphasising that this will augur well for the agriculture and industrial sectors.
Fitch and Moody’s
The minister also mentioned the expression of confidence shown by international financial institutions on the country’s economy as well as the upgrading of its ranking by Fitch and Moody’s.
He said Pakistan secured the recent tranche of the International Monetary Fund (IMF), regardless of all odds.
He said world financial institutions and our bilateral partners are standing by Pakistan on the economic front.
“Our resilience and adaptation”
Muhammad Aurangzeb emphasised the need for enhanced allocation of resources to deal with the challenge of climate change. He said that they will focus on projects in the next fiscal year that enhance “Our resilience and adaptation”.
The finance minister said that revenue collection grew by 26 per cent in the first 11 months of the current fiscal year.
Muhammad Aurangzeb said that economic recovery consolidated during the current fiscal year and expressed the firm determination to stay the course to ensure a sustainable growth trajectory.
