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
7 hours ago
- Business Recorder
Minimum wage to remain unchanged at Rs37,000 in FY26, says Aurangzeb
Finance Minister Muhammad Aurangzeb on Wednesday said the government hadn't increased the minimum wage in the budget for the financial year 2025-26 and it would remain at Rs37,000 per month. The finance minister didn't mention about the minimum wage in his budget speech on Tuesday, as he 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 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. Key highlights of Pakistan budget for 2025-26 Last year, the government increased the minimum per month wage to Rs37,000 from previously Rs32,000. However, the government has kept it unchanged this year. This comes despite a demand from a key ally of Pakistan Muslim League - Nawaz (PML-N) led government, Pakistan People's Party (PPP) to increase the minimum wage to Rs50,000.
Business Recorder
9 hours ago
- Business Recorder
Pakistan's plan to sharply increase growth faces headwinds, analysts say
ISLAMABAD: Pakistan is aiming to sharply increase economic growth under its annual federal budget unveiled on Tuesday, but analysts are sceptical about the country's ability to meet its ambitious goals. The budget targets higher revenues and a steep fiscal deficit cut under International Monetary Fund (IMF) backed reforms. Yet, defence spending was hiked 20%, excluding military pensions, after last month's conflict with India. Finance Minister Muhammad Aurangzeb said in a post-budget press conference on Wednesday that customs duties have been cut or removed on thousands of raw materials and intermediate goods. 'Industry here has to be competitive, competitive enough to export,' he said. But growth drivers remain unclear. The government is targeting 4.2% GDP growth in fiscal 2026, up from 2.7% this year, which was revised down from an initial 3.6% as agriculture and large-scale manufacturing underperformed. 'Pakistan's GDP growth projection of 4.2% appears ambitious given recent performance, and overly optimistic assumptions may place tax targets out of reach,' said Callee Davis, senior economist at Oxford Economics. Key highlights of Pakistan budget for 2025-26 Pakistan's past growth spurts were consumption-led, triggering balance-of-payments crises and IMF bailouts. The government says it now wants higher-quality, investment-driven growth. Aurangzeb said structural reforms are underway, pointing to East Asia-style pro-market transitions. 'This is an East Asia moment for Pakistan,' he said. The 17.57 trillion rupee ($62.24 billion) budget comes as Pakistan remains under a $7 billion IMF programme. Revenues are projected to rise over 14%, driven by new taxes and broadening the tax base. The fiscal deficit is targeted at 3.9% of GDP, down from this year's 5.9%. Income tax calculator for FY 2025-26 Key reforms include taxing agriculture, real estate, and retail, and reviving stalled privatisations. But revenue shortfalls this year have raised doubts, with both agriculture income tax and retail collections missing targets. Only 1.3% of the population paid income tax in 2024, government data shows. 'Pakistan's budget keeps the IMF and investors happy, even if it comes at a near-term cost to growth,' said Hasnain Malik, head of equity strategy at Tellimer. 'The political setup, with the military firmly in charge, also lowers the risk of protests.' While overall spending will fall 7%, defence will rise after the worst fighting between the nuclear-armed neighbours in decades. Including pensions, defence spending will total $12 billion, 19% of the federal budget or 2.5% of GDP, matching India's share, per World Bank data. The hike was enabled by a sharp drop in interest payments, as the central bank cut policy rates from 22% to 11% over the past year, easing domestic debt servicing costs. Aurangzeb said cuts in subsidies also helped create fiscal space.
Business Recorder
9 hours ago
- Business Recorder
Pakistan budget for FY2025-26 in brief
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. 'Because every number is locked, so we have to get money from somewhere to provide relief somewhere,' Aurangzeb said in the post-budget press conference on Wednesday. 'This is a work in progress.' Business Recorder has brought to our readers a 'Budget in Brief' that gives an overview of the federal budget for FY2025-26. The brief provides a glimpse of key priorities and objectives of the federal government, offers a summary of revenue and expenditures, fiscal deficit targets and the corresponding financing plan. Income tax calculator for FY 2025-26 The following document also provides a detailed breakdown of tax and non tax receipts, projected share of provinces under the NFC Award, capital and external receipts, and current expenditures along with its functional classification. Allocations for subsidies, grants and transfers, as well as PSDP are also provided.
