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Express Tribune
21-05-2025
- Business
- Express Tribune
Economy posts surprise growth of 2.7%
Development of SMEs, youth entrepreneurship, and rigorous economic diplomacy would be vital for the quick revival of the economy, regional expert Dr Mehmoodul Hassan Khan said. photo: file Listen to article The government on Tuesday claimed that the economy grew by 2.7% in the current fiscal year, driven by an unexpected 4.8% growth in the industrial sector — despite earlier concerns over contractionary policies and the high cost of doing business. Throughout the year, the government had reported a decline in electricity generation. However, it now claims a 39.3% increase in gross value addition in the electricity sector. Similarly, the construction sector, previously struggling due to high taxation and low demand, was reported to have grown by 6.6%. On the other hand, major crops saw a drop in output: wheat production declined by 9%, rice by 1.4% and cotton by a significant 31%. Despite the surprising growth claim, the 2.7% GDP increase is nearly equal to the population growth rate of 2.6%, suggesting that poverty and unemployment may have worsened. Moreover, the government missed even its modest growth target of 3.6%. The 113th meeting of the National Accounts Committee approved the provisional GDP growth rate of 2.68% for fiscal year 2024-25, stated the Ministry of Planning after the meeting. Planning Secretary Awais Manzur Sumra chaired the NAC meeting. Finance Minister Muhammad Aurangzeb would officially launch the economic growth figure on June 1. The planning ministry further said that the NAC approved the provisional growth rates in agriculture, industry and services sector. It said that the agriculture sector grew marginally at 0.6%, but the industrial sector grew 4.8% and the services sector by 2.9%. The 2.7% growth rate can only be attained, if Pakistan's economy grows at a pace of 5.3% in the April-June quarter of this fiscal year, said an official on the condition of anonymity. The economic growth in the third quarter was 2.4%. The per capita income is now claimed to have increased to $1,824 and the size of the economy in dollar terms is $411 billion, said the Ministry of Planning. It said that on the basis of the latest figures of the national accounts aggregates for FY 2024-25, the overall size of the economy stands at Rs114.7 trillion or $410.96 billion as compared to $371.7 billion last year. It underlined that the series of per capita income from 2016-17 onwards will be revised after the receipt of backward and forward projections of population from the sources on the basis of the 2023 Population Census. Agriculture sector The NAC approved that important crops have declined by 13.5% due to a decrease in the production of wheat from 31.8 million metric tons to 29 million tons. The claim of 29 million tons wheat production was far higher than the Ministry of Finance's own projections of around 26 million tons expected production this year. The Planning Ministry said that the production of maize decreased by 15.4% to 8.24 million tons, rice output fell 1.4% to 9.7 million tons and sugarcane output decreased 4% to 84.24 million tons. The cotton crop sustained a major hit with a 31% dip in production. The cotton bales decreased from 10.22 million bales to 7.1 million bales. But the Planning Ministry claimed that despite a 17% reduction in the production of grams, other crops have posted a provisional growth of 4.8% due to double-digit growth in the production of potato, onion, mango and sesame. While cotton ginning & miscellaneous components have declined by 19%, livestock, forestry and fishing have posted provisional growth rates of 4.72%, 3.03% and 1.42%, it added. Industrial growth The Planning Ministry claimed that in this fiscal year, "industry has shown a growth of 4.77% provisionally". Despite an increase in the production of coal (2.84%), the mining & quarrying industry contracted by 3.4% because of a decrease in production of natural gas by 7.05%), crude oil output decreased by 14.7%. The planning ministry said that large scale manufacturing also witnessed a negative growth of 1.53%, with mixed trend in the production of various groups. "Electricity, gas and water supply industry has shown a positive growth of 28.9% primarily due to low base effect of FY 2023-24, i.e., -19.86% as well as increase in output of WAPDA & companies", claimed the Planning Ministry. Construction industry increased by 6.61% due to increase in construction-related expenditures by the private sector and general government, it added. The growth in the construction sector is based on the claim that the government will spend Rs1.1 trillion on development in this fiscal year, which is untrue. Likewise, the electricity growth claim is based on the assumption that Rs1.2 trillion power subsidies will be utilized in this fiscal year. Services Sector The planning ministry said that the services sector has also shown a growth of 2.91% in 2024-25 with positive contributions from all the constituents. Wholesale and retail trade has witnessed a modest growth of 0.14% because of slower output growth in agriculture and manufacturing. Transport and storage industry has increased by 2.2% because of an increase in output of water, air and road transport, it added. Information & Communication has grown by 6.5% due to increase in output of computer programming and consultancy activities 24%). Slower rate of inflation and low base effect has resulted into positive growth rates in Finance & Insurance and Public Administration and Social Security industries at 3.22% and 9.92% respectively, it added, Further, both Education and Human health and Social Work industries have posted positive growth of 4.43% and 3.71% respectively, said the planning ministry.
Express Tribune
17-05-2025
- Business
- Express Tribune
UN projects Pakistan economy to grow by 2.3%
Development of SMEs, youth entrepreneurship, and rigorous economic diplomacy would be vital for the quick revival of the economy, regional expert Dr Mehmoodul Hassan Khan said. photo: file Pakistan is expected to experience "moderate growth, stabilising after a period of economic contraction", with its Gross Domestic Product (GDP) projected to expand by 2.3 per cent in 2025, according to a major United Nations report. The report, titled 'The UN World Economic Situation and Prospects 2025' and released a day ago, noted that declining inflation has allowed most of the South Asian region's central banks to commence or continue monetary easing in 2025. Meanwhile, Pakistan, Bangladesh and Sri Lanka are expected to continue fiscal consolidation and economic reforms under International Monetary Fund programmes. It said that the near-term outlook for South Asia was expected to remain robust, with growth projected at 5.7pc in 2025 and 6pc in 2026, "driven by strong performance in India as well as economic recovery in a few other economies", including Bhutan, Nepal and Sri Lanka.
Express Tribune
15-05-2025
- Business
- Express Tribune
Pakistan's economic recovery is a 'mini-miracle'
Development of SMEs, youth entrepreneurship, and rigorous economic diplomacy would be vital for the quick revival of the economy, regional expert Dr Mehmoodul Hassan Khan said. photo: file Pakistan's economic recovery in the recent times was a mini-miracle, a leading American financial weekly, said in a recent report, stressing that the international investors might regret not having looked at the South Asian country sooner. Writing in Baron's – a sister publication to The Wall Street Journal, award-winning financial journalist Craig Mellow says that Pakistan was not risky anymore, adding that for the markets like Pakistan, it could take a threat of war to capture the world's attention. "Pakistan isn't that risky anymore. Its economy is a mini-miracle," the article said. "For markets like Pakistan, it can take a threat of war to capture the world's attention. Investors may regret not having looked sooner," it added. The report published on Tuesday highlighted key economic indicators, suggesting macroeconomic stability, including a significant decline in the inflation rate from a record 38% in May 2023 to 0.3% in April 2025. Citing the latest economic data, the report said that 40% annual inflation had now plummeted to almost zero, the Pakistan Stock Exchange (PSX) index had tripled, while the price of Pakistani Eurobonds, maturing in 2031, had increased from 40 cents per dollar to 80 cents. "The country of 255 million has pulled off a macroeconomic miracle of sorts over the past two years," read the report. "Pakistan is a good story. So good it's not risky enough for us anymore," Genna Lozovsky, Chief Investment Officer at Sandglass Capital Management told Barron's. The report suggested that the latest armed conflict with the India "won't likely knock Pakistan's recovery off course", underscoring the sentiment shared by Finance Minister Muhammad Aurangzeb that the skirmish was a "short duration escalation" with minimal fiscal impact. However, experts cited in the report, noted that Pakistan largely remained dependent on international creditors, especially the International Monetary Fund (IMF), and under its bailout programme.
Express Tribune
12-05-2025
- Business
- Express Tribune
US claims progress in trade talks with China
Trump's high tariff syndrome would backfire, subduing capital flows, reducing investments, discouraging joint ventures and development of green technologies, said Centre for South Asia & International Studies Executive Director Dr Mehmoodul Hassan Khan. photo: REUTERS Washington expressed optimism at the end of a weekend of trade talks with China aimed to de-escalate trade tensions sparked by President Donald Trump's aggressive tariff rollout. "I'm happy to report that we've made substantial progress between the United States and China in the very important trade talks," US Treasury Secretary Scott Bessent told reporters in Geneva. "The talks were productive," he said, taking no questions from the media, but promising a "complete briefing" on the outcome of the talks on Monday. Trade Representative Jamieson Greer, who also took part in the two days of closed-door talks with Chinese Vice Premier He Lifeng, said that the differences between the sides were "not so large as maybe thought". After the first day of negotiations, Trump had posted on Truth Social that the discussions had been "very good", describing them as "a total reset negotiated in a friendly, but constructive, manner". Beijing had yet to comment Sunday, but on Saturday Chinese state news agency Xinhua described the talks as "an important step in promoting the resolution of the issue". The Chinese delegation was expected to speak to the media Sunday evening. The meetings marked the first time senior officials from the world's two largest economies have met face-to-face to tackle the topic of trade since Trump slapped steep new levies on China last month, sparking a robust retaliation from Beijing. "The talks reflect that the current state of the trade relations with these extremely high tariffs is ultimately in the interests of neither the United States nor China,", Citigroup global chief economist Nathan Sheets told AFP. He called the tariffs a "lose-lose proposition". The tariffs imposed by Trump on the Asian manufacturing giant since the start of the year currently total 145 percent, with cumulative US duties on some Chinese goods reaching a staggering 245 percent. In retaliation, China put 125-percent tariffs on US goods. Ahead of the meeting at the discrete villa residence of the Swiss ambassador to the United Nations in Geneva, Trump signalled he might lower the tariffs, suggesting on social media that an "80% Tariff on China seems right!" However, his press secretary Karoline Leavitt later clarified that the United States would not lower tariffs unilaterally. China would also need to make concessions, she said. Going into the meeting, both sides played down expectations of a major change in trade relations. Bessent underlined a focus on "de-escalation" and not a "big trade deal", while Beijing insisted that the United States had to ease tariffs first.
Express Tribune
11-05-2025
- Business
- Express Tribune
Pak-UK trade ties poised for expansion
The role of economic, trade and commercial attaches appointed in the UK and EU would be constructive and transformative. Pakistani-origin politicians and policymakers should also positively contribute in this connection. photo: file Listen to article Increasing business and trade relations with the UK can provide Pakistan and its industries an alternative destination to achieve the desired goals of socio-economic prosperity, qualitative industrialisation and exports, in which the Pakistani businessmen and investors settled in the UK can play an important role. Rising cooperation in health, education, hospitality, culture, IT, human resource development, textiles, fashion, classic textiles and chemical industries can be mutually beneficial for both countries. The mutual cooperation may be further strengthened through series of meaningful reforms, concessions, policies and productive channels mainly building of reciprocal trade houses, Preferential Trade Agreement (PTA)/Free Trade Agreement (FTA), exchange of delegations of chambers, regular holding of expos, festivals of one-country product, exchange of information and formation of Pak-UK Industries Corridor of Knowledge. It augurs well that the British High Commissioner to Pakistan, Jane Marriott, is determined to further strengthen its strategic partnership with Pakistan across several vital sectors, including finance, healthcare, education, engineering, and energy. Centre for South Asia and International Studies, Islamabad Executive Director Dr Mehmoodul Hassan Khan said Pakistan's economy may be further developed and diversified through the investments, expertise, digitalisation, AI, robotics, IT, supply chains and Small and Medium-sized Enterprises (SMEs), micro-financing, banking, disaster management and climate change cooperation. He said close cooperation in non-traditional sectors of the economy, mainly marbles, precious stones, halal foods, organic cooking oils, cultural products and handicrafts may also be a value addition in this direction. The policy makers of Pakistan, businessmen, investors and regional experts and economic strategists should play a collaborative, consultative and coordinated role in the further strengthening of bilateral relations. The role of economic, trade and commercial attaches appointed in the UK and European Union would also be constructive and transformative. Pakistani-origin politicians and policymakers should also positively contribute to this connection. Pakistanis' community, workers, businessmen, investors and even students/youth with entrepreneurship capabilities and capacities would also be value addition for achieving the desired goals of economic modernisation, connectivity, industrial productivity, trade diversification, cluster of industrial development, space and sciences, affordable and innovative housing industries, interior decoration equipment, climate resilient construction materials and moreover integrative and interconnected cooperation, collaboration and coordination in metals and minerals would also be pursued and implements. Moreover, genuine demands of business community in terms of easy and smooth grant of visas, revival of direct aerial/aviation cooperation, and joint ventures in human resource industries, education, health, tourism through constant and continued soft image diplomacy along with multiculturalism caravans and state's guarantee for safety and security of the UK investments would be effective and participatory. UK is one of the sustainable and stable economies of the European Union and extended cooperation in green finance, disaster management, climate change technologies, organic fertilisers, green financial instruments, banking and finance derivatives, community based innovative anti-climate financing tools, green bonds markets, green vaccines, green plantation, renewables (solar, wind), modern green and blue hydrogen power generation energy tools, peaceful nuclear energy cooperation, hybrid agriculture, fisheries, halal food chains and concessional green financing or credit facilities would also further foster economic cooperation and ties between UK and its private companies. UK being champion of humanity, civilisation, modern democracy, corporate and good governance, climate justice global drive and multiculturalism should also play an important role in people's friendly local government setups, decentralisation of financial resources, channelisation of domestic talents, empowerment of women, eradication of poverty and generation of new jobs in the country because after closure of USAIDS, UK has the ability, vision, and resources to jump-in in these sectors of human services. What's more, Federal minister for Finance and Revenue, Senator Muhammad Aurangzeb, Advisor to the Finance Minister on Economic and Financial Reforms Khurram Schehzad and Advisor to the Prime Minister on Privatisation Muhammad Ali recently attended the Jefferies' 'Pakistan Access Day' interactive conference in London, where the finance minister underscored the Pakistan's firm commitment to macroeconomic reform and structural transformation and the government's resolve to stay the course to bring permanence to this macroeconomic stability. When it comes to Pakistan and UK bilateral trade for FY24, exports and imports consist of $2,014,768 and $781,996. Pakistan's major exporting items to the UK include other made-up textile articles; sets; worn clothing and worn textile articles; rags, optical, photographic, cinematographic, measuring, checking, precision, medical or surgical, cotton, articles of apparel and clothing accessories, knitted or crocheted, cereals, articles of leather; saddlery and harness; travel goods, handbags and similar containers; articles, edible fruit and nuts; peel of citrus fruit or melons, plastics and articles, sugars and sugar confectionery. Pakistan's major importing items from the UK encompass iron and steel, electrical machinery and equipment and parts; sound recorders and reproducers, television, nuclear reactors, boilers, machinery and mechanical appliances; vehicles other than railway or tramway rolling stock, and parts and accessories; miscellaneous chemical products; organic chemicals; plastics and articles. The writer is a staff correspondent
