Pakistan Economic Survey 2024-25: Optimism Amidst Missed Targets
Table of Contents
Finance Minister Muhammad aurangzeb presented the Pakistan Economic Survey 2024-25, projecting a 2.7% GDP growth despite previous misses. Key highlights include increased per capita income, a current account surplus, and a drop in inflation.Though, the ambitious growth target faces scrutiny.
Key Takeaways from the Pakistan Economic Survey 2024-25:
- GDP Growth: Projected at 2.7% for FY25, but requires a significant 5.5% growth in the last quarter too achieve.
- Missed Targets: Marks the third consecutive year the government has fallen short of its GDP growth target.
- Per Capita Income: Increased to $1,824 from $1,662.
- Current Account: Surplus of $1.9 billion from July to April, a significant turnaround from last year’s $1.3 billion deficit.
- Inflation: Dropped to 4.7%, a ample decrease from the targeted 12% and last year’s 23.4%.
Detailed Analysis:
Finance Minister Aurangzeb defended the 2.7% GDP growth projection, stating it was based on official government estimates. The survey, a crucial pre-budget document, provides insights into Pakistan’s socio-economic performance.
Sector-Specific Performance:
- Agriculture: Grew by 0.56%,contributing 23.54% to GDP and employing over 37% of the labor force.Livestock was a major driver, expanding by 4.72%. However, the crops sub-sector contracted by 6.82% due to adverse weather.
- Industry: Showed a growth of 4.8%, a significant improvement from the previous year’s -1.4%. Construction saw a 6.6% increase.
- Services: Expanded by 2.9%,with facts and communications leading the way at 6.5%.
Inflation and Monetary Policy:
The Finance Minister highlighted the significant drop in inflation, from a CPI of over 29% in 2023 to just 4.6%. He also noted the reduction in the key policy rate,which previously stood at 22%.
Debt and Forex Reserves:
Public debt and the debt-to-GDP ratio have decreased. Forex reserves reached $9.4 billion as of June 30, 2024, a substantial recovery from previous lows.
IMF and Economic Reforms:
Aurangzeb emphasized the importance of an Extended Fund Facility with the IMF to ensure macroeconomic stability and implement structural reforms. He highlighted efforts to increase the tax-to-GDP ratio through technology and process improvements.
SOEs and Privatization:
The government plans to privatize 24 state-owned enterprises (SOEs) to reduce financial burdens. Pension reforms are also underway to address legacy issues.
current Account and Trade:
Pakistan recorded a current account surplus of $1.9 billion. Exports increased by 7%, particularly in the IT sector. Remittances also saw a significant rise.
revenue Collection:
Revenue collection increased by 26%, driven by a growth in individual and high-value tax filers.
Geopolitical Context:
Aurangzeb alluded to challenges faced during IMF negotiations,referencing actions by India.
Conclusion:
The Pakistan Economic Survey 2024-25 paints a picture of cautious optimism, with some positive indicators but also persistent challenges. The upcoming budget will be crucial in addressing these issues and ensuring lasting economic growth.
Keywords:
Pakistan Economic Survey, GDP Growth, Muhammad Aurangzeb, Inflation, Current Account, IMF, Economic Reforms, Privatization, revenue Collection, pakistan Economy
