ISLAMABAD – Pakistan’s economy grew by 2.7% in the outgoing fiscal year 2024–25, falling short of the 3.6% GDP growth target, according to the Economic Survey unveiled by Finance Minister Muhammad Aurangzeb on Monday. The finance minister, described the pace of recovery as “gradual but sustainable,” avoiding what he termed the dangers of a “boom and bust cycle.”
The provisional figures show mixed performance across sectors. Agriculture saw minimal growth of 0.56%, while industry expanded 4.77% and services grew by 2.91%. Aurangzeb emphasised that the current trajectory, while modest, was preferable for long-term economic stability.
“GDP growth in FY23 stood at -0.2%, and we saw a rebound to 2.5% in FY24. With 2.7% growth this year, we’re cautiously heading in the right direction,” he said during the unveiling.
The survey comes ahead of the federal budget announcement for FY26, now scheduled for Tuesday, June 10. Originally slated for earlier in the month, the dates were pushed back to June 9 and 10 for the survey and budget, respectively.
On the global front, Aurangzeb cited a slowdown, with world GDP growth declining from 3.5% in 2023 to an estimated 2.8% in 2024.
Inflation in Pakistan saw a steep decline over the year, with the consumer price index (CPI) dropping from over 29% in 2023 to 4.6% in recent months. “I think we have moved in the right direction,” the finance minister noted, attributing the trend to better fiscal management and a declining policy rate.
Pakistan’s debt-to-GDP ratio also improved slightly, falling from 68% to 65%, while the tax-to-GDP ratio hit a five-year high. Aurangzeb reiterated the need for deep structural reforms to “fundamentally change the economic DNA of the country.”
Touching on the energy sector, he said a critical Rs1.27 trillion circular debt resolution plan signed with banks would help stabilize the power sector. He also hinted at renewed momentum for privatization in the upcoming fiscal year.
On fiscal health, Aurangzeb revealed that debt servicing remained the government’s largest expense, but a falling interest rate environment had helped save between Rs800 billion to Rs1 trillion in servicing costs.
The National Economic Council (NEC), which met last week, approved the 2.7% growth estimate and set a more ambitious target of 4.2% for FY26. It also endorsed a development budget of Rs3.483 trillion, with Rs1.1 trillion allocated federally and Rs2.383 trillion to the provinces.
Remittances recorded a notable 30.9% increase from July 2024 to April 2025, while the current account remained in surplus for the first time in recent years. The fiscal deficit narrowed to 2.6% of GDP, and the primary surplus stood at 3%.
As the government prepares to present its FY26 budget, the Economic Survey serves as a key benchmark of progress—and challenges—as it navigates a fragile recovery path amid global uncertainty and domestic fiscal constraints.
