Economic Survey 2024-25: Pakistan misses growth target
Pakistan missed its GDP growth target of 3.6% in the outgoing fiscal year, posting a figure of 2.7%, revealed the Economic Survey 2024-25 unveiled by Finance Minister Muhammad Aurangzeb, former CEO and president of one of the country's largest banks, on Monday.
Commenting on the global economy, Aurangzeb noted that the global GDP growth in 2023 stood at 3.5%, which was reduced to 3.3% in 2024 and is now projected to be 2.8% according to the latest estimates.
'GDP growth in 2023 stood at -0.2%, which grew to 2.5% in FY24. We announce a 2.7% GDP growth for FY25,' said Aurangzeb.
The finance minister termed it a gradual recovery. 'From my perspective, it is the right way to go in terms of sustainable growth,' he said.
The survey serves as a crucial document ahead of the annual federal budget, offering detailed insights into the country's socio-economic performance over the outgoing fiscal year.
The government will announce the budget for the financial year 2025-26 on Tuesday.
The earlier dates for the Economic Survey 2024-25 and budget announcement for FY26 were June 1 and June 2, respectively.
However, the government extended the dates to June 6 and June 7.
The National Economic Council (NEC) on Wednesday approved a gross domestic product (GDP) growth rate of 2.7% for the outgoing fiscal year and a projected growth rate of 4.2% for the next financial year.
The NEC was informed that Rs3.483 trillion was being spent on the annual national development, of which Rs1.100 trillion was the share of the federation and Rs2.383 trillion was the share of provinces.
The meeting was told that remittances increased by 30.9% from July 2024 to April 2025, and the current account balance remained positive for the first time.
The fiscal deficit in the fiscal year 2024-25 further decreased to 2.6% of the GDP, while the primary balance remained 3% of the GDP.
More to follow
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
37 minutes ago
- Business Recorder
Govt unveils ambitious digital overhaul for FBR in Budget 2025–26
The Federal Board of Revenue (FBR) is set to undergo a sweeping digital transformation as part of the government's strategy to modernise Pakistan's tax administration and improve revenue collection, according to the federal budget speech presented by Finance Minister Muhammad Aurangzeb for FY2025–26 on Tuesday. Aurangzeb presented the federal budget for the second time as the coalition government sought to revive the economy, meet the International Monetary Fund (IMF) benchmarks and provide some relief to the tax-weary masses. FBR Tax Target The Federal Board of Revenue (FBR) is assigned to collect Rs14.13 trillion in FY26, up 19% as compared to Rs11.9 trillion revised estimates for FY25. The tax collection for FY26 includes Rs6.9 trillion in direct taxes and Rs7.2 trillion in indirect taxes. Key components of the transformation The reform plan includes a nationwide rollout of Digital Production Tracking, aimed at monitoring manufacturing output and linking it with digital invoicing systems. This move is expected to reduce underreporting of production and ensure greater documentation of business activity. To further strengthen documentation, the FBR is expanding business-to-business (B2B) e-Invoicing, making it mandatory across multiple sectors. The plan also includes deeper integration of the Point of Sale (POS) system for retailers and the deployment of an E-way Billing framework to digitally track the movement of goods. In a significant shift away from traditional audit practices, the FBR will fully implement Faceless Audit and Faceless Customs Audit systems. These aim to eliminate human discretion in audit processes, reduce corruption, and improve taxpayer confidence. Technology-led enforcement Artificial Intelligence (AI) will be used for risk-based audit selection, while fraud analytics tools will support customs enforcement and refund scrutiny. A Central Control Unit is being established to provide real-time visibility and centralised oversight across all enforcement and compliance operations. Workflow digitisation is also being prioritised, with automated alerts and a digital case management system intended to expedite processing and enforcement without bureaucratic delays. Institutional support and capacity building The transformation will be supported by the PRAL Board, which will oversee IT governance and system upgrades. Additionally, the government plans to introduce 'Audit Mentors' within the FBR to guide staff through the transition and promote digital literacy. According to budget documents, these reforms are not only targeted at boosting the tax-to-GDP ratio – currently one of the lowest in the region – but also at aligning Pakistan's tax administration with global best practices. What this means for taxpayers For taxpayers and businesses, the FBR's digital push signals a future of increased compliance obligations but potentially fewer bureaucratic hurdles. E-invoicing, production tracking, and centralised audits will make non-compliance harder and speed up legitimate processing. The government's digital transformation agenda is expected to gain traction over the fiscal year, with multiple milestones scheduled for rollout through FY2026.
Business Recorder
an hour ago
- Business Recorder
Rs10mn yearly income: govt proposes to reduce surcharge by 1% to halt ‘brain drain'
Finance Minister Muhammad Aurangzeb in his Budget 2025-26 speech proposed 1% reduction in the surcharge on those individuals whose income exceed Rs10 million a year, in an effort to halt 'brain drain' among skilled and unskilled workers. The current surcharge is 10% which the government announced to reduce to 9%, recognising the harm to the economy of workers leaving Pakistan. The Bureau of Emigration & Overseas Employment (BE&OE) and the Overseas Employment Corporation (OEC) registered 727,381 workers for overseas employment in 2024, according to The Economic Survey 2024-25 as unveiled by Aurangzeb on Monday. According to BE&OE, more than 62 percent (452,562) of Pakistani workers moved to Saudi Arabia for employment, followed by Oman (11 percent), to earn a living. UAE employed 64,130 Pakistani workers (9 percent) while Qatar offered jobs to 40,818 individuals (6 percent). Bahrain and Malaysia hosted 25,198 workers (3 percent) and 5,790 workers (1 percent), respectively. In 2024, the highest number of workers who moved away from Pakistan for work originated from Punjab (404,345), followed by Khyber Pakhtunkhwa (187,103), Sindh (60,424), and Tribal areas (29,937). Brain drain is a growing concern for developing countries like Pakistan, as talent from less developed countries is drawn to developed nations due to higher salaries, access to cutting-edge technology, better living standards and more stable political environments.
Business Recorder
2 hours ago
- Business Recorder
Budget 2025-26: Pakistan targets 4.2% growth as Aurangzeb presents proposals ‘for a competitive economy'
Finance Minister Muhammad Aurangzeb announced Pakistan's federal budget 2025-26 'for a competitive economy' on Tuesday, targeting a modest 4.2% growth for the coming fiscal year, compared to 2.7% expected in the outgoing FY25. The budget was announced, amid ruckus from the opposition lawmakers of Pakistan Tehreek-e-Insaf (PTI), with a total outlay of Rs17.6 trillion, down 7% or Rs1.3 trillion as compared to the Rs18.9 trillion budgeted outlay of FY25. The CPI inflation rate is budgeted to be around 7.5% in FY26, whereas the budget deficit is expected to be around 3.9% of the GDP, while the primary surplus is budgeted at 2.4% of the GDP. 'We are focused on economic stability and prosperity. We want an economy which is equitable and sustainable,' said Aurangzeb in his address. Talking about the outgoing fiscal, the minister said that the country achieved a surplus of around 2.4% of the GDP in FY25, whereas the CPI rate declined to 4.7%. 'We expect a current account surplus of around $1.5 billion this fiscal,' he said, adding that remittance inflows are expected to hit $37-38 billion in FY25. On taxation measures, Aurangzeb said that from July onwards, the tax filing process will be simplified. Aurangzeb, presents the federal budget for the second time as the coalition government seeks to revive the economy, meet the International Monetary Fund (IMF) benchmarks and provide some relief to the tax-weary masses. Mark-up Payments Of the total expenditure, Rs8.2 trillion has been allocated for mark-up payments, accounting for 47% of the total government expenditure. PSDP The federal government has allocated Rs1 trillion for the Public Sector Development Programme (PSDP). FBR Tax Target The Federal Board of Revenue (FBR) is assigned to collect Rs14.13 trillion in FY26, up 19% as compared to Rs11.9 trillion revised estimates for FY25. The tax collection for FY26 includes Rs6.9 trillion in direct taxes and Rs7.2 trillion in indirect taxes. Defence budget shoots up Pakistan has allocated Rs2.55 trillion for defence in the incoming fiscal year, higher than Rs2.1 trillion, i.e. an increase of over 21% allocated in FY25. Talking about debt management, the finance minister reiterated that the preparation for the issuance of the first Panda Bonds is completed to penetrate the Chinese capital market. He added that the privatisation process of PIA and the Roosevelt Hotel will be completed in the incoming fiscal year. Finance Minister Aurangzeb, who is delivering his second budget speech in the National Assembly, will also lay the Finance Bill 2024 in the Senate on the same day, as required under Article 73 of the Constitution. Ahead of the budget address, the federal cabinet approved the budget proposals for the next fiscal year (2025-26). Addressing the federal cabinet meeting, Prime Minister Shehbaz Sharif said Pakistan has now come into a take-off position as all economic indicators are satisfactory. 'After defeating India in a conventional war, now we have to surpass it in the economic field as well,' he added. Some areas of interest: GDP growth target External financing estimates Taxation on the salaried group PSDP size and focus Broadening the tax base Defence budget The budget comes a day after the government missed its GDP growth target of 3.6% in the outgoing fiscal year, posting a figure of 2.7%, as revealed in the Economic Survey 2024-25. However, Aurangzeb, during his press briefing while unveiling the Pakistan Economic Survey 2023-24, highlighted a strong 4.8% rebound in industrial activity, pushing the economy's size to $411 billion for the first time and raising per capita income to $1,824.
