Pakistan’s economy showed signs of stabilisation in FY2024-25, marked by an improved external position, moderating inflation, and a gradual recovery in industrial output, according to the Annual Plan Review 2024-25 shared by the Planning Commission.
The current account recorded a surplus of $1.88 billion during July-April, reversing a deficit from the previous year. This improvement came despite a wider trade deficit and continued outflows in primary income, supported by a sharp 30.9% rise in workers’ remittances, which reached $31.2 billion.
Inflation declined significantly, with average CPI dropping to 4.7% during the first ten months of FY2024-25 from 26% a year earlier. In April 2025, year-on-year inflation fell to just 0.3%, with food prices in negative territory across both urban and rural areas.
The industrial sector rebounded with 4.8% growth after a contraction last year, driven by strong gains in utilities and construction. However, large-scale manufacturing continued to struggle, posting a 1.5% contraction. The services sector grew by 2.9%, supported by gains in information technology, finance, and public administration.
On the fiscal front, government revenues during July-March rose by 36.7% to Rs13.3 trillion, while expenditures grew by 19.4% to Rs16.3 trillion. The fiscal deficit narrowed to 2.6% of GDP, well below the annual target of 5.9%. Federal Board of Revenue (FBR) tax collections rose by 26.3%, buoyed by domestic levies and tighter compliance.
National savings improved to 14.1% of GDP from 12.6% last year, while the country’s debt-to-GDP ratio declined slightly to 66.3%. Gross public debt stood at Rs76 trillion by end-March 2025, with domestic debt making up over two-thirds of the total.
The rupee appreciated by 1.81% during the period, while foreign exchange reserves rose by $1.6 billion to reach $15.6 billion by early May. The Real Effective Exchange Rate fell to 99.42, reflecting improved price competitiveness.
Pakistan also received a $1.02 billion tranche from the IMF under the Extended Fund Facility, further strengthening the country’s reserve position. Meanwhile, ICT exports rose by 21.1% to $3.14 billion, accounting for nearly half of total services exports.
Total external debt and liabilities edged down to $130.3 billion, with public external debt rising modestly to $99.2 billion. Debt repayments and interest payments during the first nine months of the fiscal year reached $7.5 billion and $3.99 billion, respectively.
