Amid a challenging global environment marked by slower growth, trade restrictions and policy uncertainty, Pakistan’s macroeconomic performance continues to demonstrate resilience, the Ministry of Planning, Development and Special Initiatives said in its “Monthly Development Update for July 2025”.
“Pakistan’s macroeconomic performance in FY2025 demonstrated resilience despite global headwinds, with GDP growth rising to 2.7% and inflation dropping sharply to an average of 4.5%, the lowest since FY2016,” the report said.
The report says that the strong fiscal consolidation reduced the deficit to 3.7% of GDP, supported by record tax revenues of Rs11,740 billion, while the external sector posted a $1.8 billion current account surplus, driven by record remittances ($34.9 billion) and higher exports ($32.1 billion). These improvements strengthened reserves, stabilized the exchange rate, and reinforced market confidence, reflecting effective economic management and resilience amid global challenges.
The effective fiscal consolidation and external sector stability underscore Pakistan’s stronger-than-expected recovery trajectory. “This performance reflects prudent economic management and signals growing confidence in Pakistan’s ability to navigate external shocks and sustain a path towards stability and inclusive growth,” it adds.
On the development front, in June 2025, 33 projects worth Rs 90.4 billion were approved, and 19 projects totalling Rs 1,422.8 billion were recommended to the Executive Committee of the National Economic Council (ECNEC).
Major investments targeted energy (over Rs. 500 billion), transport (Hyderabad–Sukkur Motorway at Rs. 395 billion, Eastbay Expressway at Rs. 301 billion), education (Rs. 43 billion for 17 projects), health (Rs. 25.5 billion), and water (Ghand Dam at Rs. 6.4 billion).
These initiatives are expected to generate 9,986 direct and 47,174 indirect jobs. PSDP spending remained strong, with 96% (Rs. 1045 billion) utilization, reflecting improved execution and fiscal discipline, while cost rationalization eorts saved Rs. 891 million in May alone.
According to the report, monitoring and evaluation systems were reinforced through field monitoring, third-party validations, and a new MoU with SUPARCO for satellite-based oversight. High-level engagements advanced governance and capacity building with the UAE, deepened CPEC cooperation with China, and earned international recognition for higher education reforms in Morocco, it adds.
“Looking ahead, Pakistan aims to sustain this momentum through high-impact, export-led, and inclusive development under the ‘URAAN Pakistan’ framework,” it says.
It says, Pakistan’s macroeconomic stability, supported by improved fiscal and external sector indicators, lays a strong foundation for an accelerated development trajectory. The government’s strategic focus on high-impact, inclusive, and export-led projects under the PSDP aligns with the priorities of “URAAN Pakistan,” emphasising exports, digitalisation, green growth, energy security, and social equity.
With targeted investments in energy, infrastructure, education, and regional uplift, the development program aims to enhance productivity, create quality jobs, and strengthen human capital.
Robust monitoring and evaluation reforms are addressing chronic implementation gaps, reducing time and cost overruns, and promoting evidence-based adjustments.
Enhanced cooperation with development partners and integration of advanced technologies are expected to improve delivery further.
“Moving forward, leveraging limited resources to maximise development impact will be a core priority of the government to achieve sustained, equitable growth and transform Pakistan into a dynamic, resilient, and forward-looking economy”, it adds.
