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Express Tribune
10 hours ago
- Business
- Express Tribune
Federal Budget 2025-26 to be presented in National Assembly today
Listen to article The Federal Budget for the upcoming fiscal year will be presented in the National Assembly today (Tuesday) with discussion to begin June 13 and carry on till June 21. Finance Minister Muhammad Aurangzeb will present the budget in the Assembly, after which he will lay a copy of the Finance Bill 2025-26, including the Annual Budget Statement, before the Senate for further consideration. On Monday, Pakistan unveiled its Economic Survey 2024-25, revealing measurable improvement across key indicators, though challenges remain in the agriculture and manufacturing sectors. The survey showed that the government has managed to consolidate economic recovery by avoiding a "sugar rush" and stabilise the external sector, yet again, it could not meet the most critical targets necessary to give economic growth figures credibility and help increase investment. Economic growth rate stays at 2.7%, which is a right way to go for sustainable growth in order to avoid boom-bust cycles, said the finance minister, while referring to historical patterns of achieving higher growth rates followed by collapse the next year. However, the claimed growth rate is below the target of 3.6% and is also disputed by independent economists. Here is a look at its key highlights: Growth and investment Real GDP recorded growth of 2.68% in FY2025, underpinned by broad-based stabilization across key macroeconomic indicators. The industrial sector posted 4.77% growth driven by manufacturing recovery, while the services sector expanded 2.91%, maintaining its position as the largest GDP contributor with a 58.40% share. GDP at current market prices increased to Rs114,692 billion, reflecting a 9.1% increase from the previous year's Rs105,143 billion. The investment-to-GDP ratio reached 13.8% compared to 13.1% in FY2024, while the saving-to-GDP ratio increased to 14.1% from 12.6% last year. Fiscal performance The fiscal deficit narrowed to 6.5% of GDP from 7.4% last year. Revenue collection grew 29% to Rs10.8 trillion, with tax revenue increasing 38%. Current expenditures rose 26% due to higher interest payments. Monetary situation Inflation declined sharply to a record low of 0.3% in April 2025, down from 17.3% in April 2024. The average CPI inflation for July-April was 4.7%, marking a significant decrease from 26.0% in the same period last year. The State Bank cut policy rates by 450 basis points to 17.5% since July 2024. Broad money supply grew 13.7%. Agriculture sector The agriculture sector demonstrated resilience in FY2025, recording growth of 0.56%, primarily driven by livestock performance. The sector's share in GDP declined slightly to 23.54% from 24.03% in FY2024. Important crops declined by 13.49% due to reduced cultivation area and adverse weather conditions, significantly affecting cotton (-30.7%), wheat (-8.9%), sugarcane (-3.9%), maize (-15.4%), and rice (-1.4%). Cotton production was recorded at 7.08 million bales, sugarcane 84.24 million tonnes, wheat 28.98 million tonnes, and rice at 9.72 million tonnes. Other crops grew by 4.78%, driven by robust performances in potato (11.5%), onion (15.9%), and mash (4.7%). Cotton ginning lost momentum, declining by 19.03% compared to the growth of 47.23% in the previous year. The livestock sector, contributing 63.60% to agriculture and 14.97% to Pakistan's GDP, grew by 4.72% in FY2025, up from 4.38% the previous year. The forestry sector recorded growth of 3.03%, maintaining a steady contribution of 2.31% to agriculture and 0.54% to GDP. The fisheries sector grew by 1.42%, improving from 0.81% last year, with a sectoral share of 1.31% in agriculture and 0.31% in GDP. External sector Per capita income reached $1,824, up from $1,662 in the previous year, showing a 9.7% increase supported by improved economic activity and a stable exchange rate. The current account recorded a $1.2 billion surplus (0.3% of GDP), while remittances grew 11% to $32 billion. Foreign reserves reached $14.3 billion, covering 3.6 months of imports. Health and education Pakistan's health sector showed modest improvements in FY2024- 25, with infant mortality declining to 52 per 1,000 live births from 56 last year, though national health expenditures remained at just 1.4% of GDP. The education sector saw literacy rates rise to 62.8%, while primary school enrollment reached 28.6 million children, yet education spending stayed at 2.1% of GDP, below regional benchmarks. Technology and infrastructure The IT sector emerged as a bright spot, with exports surging 32% to $3.5 billion and digital banking transactions growing 89% to Rs12.7 trillion, as mobile broadband penetration reached 57% of the population. Transport infrastructure expanded with road networks growing to 284,772 km and aviation passenger traffic jumping 24%, though rural connectivity gaps persist. Demographics and labor Population growth slowed slightly to 2.4%, with urban residents now comprising 40.1% of Pakistan's 241.5 million people, while labor force participation remained stagnant at 37.2%, with significant gender disparities. "Our digital transformation is accelerating, but human development needs matching investment," Finance Minister Muhammad Aurangzeb told reporters during the survey's launch. Power sector Pakistan's installed electricity generation capacity rose to 46,605 MW in FY2024–25, up 1.6% from 45,888 MW last year, according to the Economic Survey. However, this increase has deepened the burden on consumers, who pay Rs 2.5–2.8 trillion annually in capacity payments to idle power plants producing no electricity. Debt and Capital Markets Pakistan's public debt stood at Rs67.8 trillion (74.1% of GDP) by March 2025, marking a 2.3 percentage point decline from last year's 76.4% debt-to-GDP ratio. Domestic debt comprised 61% of the total at Rs41.4 trillion, while external debt accounted for Rs26.4 trillion. The capital market demonstrated robust growth with market capitalization at the Pakistan Stock Exchange surging 50% to Rs10.2 trillion, while the benchmark KSE-100 index gained 78,000 points during FY2025. Corporate bond issuance increased 38% year-on-year to Rs480 billion. Manufacturing and Mining Manufacturing output showed mixed results, with the industrial sector posting 4.77% growth driven by a recovery in manufacturing. Small-scale manufacturing and slaughtering helped offset contractions in large-scale manufacturing (LSM). The auto sector rebounded strongly with 42% production growth, while cement output declined 7.2%. The mining sector grew 2.1%, with coal production increasing 12% to 10.4 million tonnes. However, mineral exports fell 9% to $682 million due to global price fluctuations. Chromite production dropped 18% while rock salt output grew 5%. The mixed results come ahead of Tuesday's budget announcement, with observers watching for increased allocations to health and education.
Express Tribune
a day ago
- Business
- Express Tribune
Pakistan Economic Survey 2024–25: wins, warnings and what's next
Pakistan has unveiled its Economic Survey 2024-25, revealing measurable improvement across key indicators, though challenges remain in the agriculture and manufacturing sectors. Here is a look at its key highlights: Growth and Investment Agriculture sector The agriculture sector demonstrated resilience in FY2025, recording growth of 0.56%, primarily driven by livestock performance. The sector's share in GDP declined slightly to 23.54% from 24.03% in FY2024. Important crops declined by 13.49% due to reduced cultivation area and adverse weather conditions, significantly affecting cotton (-30.7%), wheat (-8.9%), sugarcane (-3.9%), maize (-15.4%), and rice (-1.4%). Cotton production was recorded at 7.08 million bales, sugarcane 84.24 million tonnes, wheat 28.98 million tonnes, and rice at 9.72 million tonnes. Other crops grew by 4.78%, driven by robust performances in potato (11.5%), onion (15.9%), and mash (4.7%). Cotton ginning lost momentum, declining by 19.03% compared to the growth of 47.23% in the previous year. The livestock sector, contributing 63.60% to agriculture and 14.97% to Pakistan's GDP, grew by 4.72% in FY2025, up from 4.38% the previous year. The forestry sector recorded growth of 3.03%, maintaining a steady contribution of 2.31% to agriculture and 0.54% to GDP. The fisheries sector grew by 1.42%, improving from 0.81% last year, with a sectoral share of 1.31% in agriculture and 0.31% in GDP. Growth and investment Real GDP recorded growth of 2.68% in FY2025, underpinned by broad-based stabilization across key macroeconomic indicators. The industrial sector posted 4.77% growth driven by manufacturing recovery, while the services sector expanded 2.91%, maintaining its position as the largest GDP contributor with a 58.40% share. GDP at current market prices increased to Rs114,692 billion, reflecting a 9.1% increase from the previous year's Rs105,143 billion. The investment-to-GDP ratio reached 13.8% compared to 13.1% in FY2024, while the saving-to-GDP ratio increased to 14.1% from 12.6% last year. Fiscal Performance The fiscal deficit narrowed to 6.5% of GDP from 7.4% last year. Revenue collection grew 29% to Rs10.8 trillion, with tax revenue increasing 38%. Current expenditures rose 26% due to higher interest payments. Monetary situation Inflation declined sharply to a record low of 0.3% in April 2025, down from 17.3% in April 2024. The average CPI inflation for July-April was 4.7%, marking a significant decrease from 26.0% in the same period last year. The State Bank cut policy rates by 450 basis points to 17.5% since July 2024. Broad money supply grew 13.7%. External sector Per capita income reached $1,824, up from $1,662 in the previous year, showing a 9.7% increase supported by improved economic activity and a stable exchange rate. The current account recorded a $1.2 billion surplus (0.3% of GDP), while remittances grew 11% to $32 billion. Foreign reserves reached $14.3 billion, covering 3.6 months of imports. Health and education Pakistan's health sector showed modest improvements in FY2024- 25, with infant mortality declining to 52 per 1,000 live births from 56 last year, though national health expenditures remained at just 1.4% of GDP. The education sector saw literacy rates rise to 62.8%, while primary school enrollment reached 28.6 million children, yet education spending stayed at 2.1% of GDP, below regional benchmarks. Technology and Infrastructure The IT sector emerged as a bright spot, with exports surging 32% to $3.5 billion and digital banking transactions growing 89% to Rs12.7 trillion, as mobile broadband penetration reached 57% of the population. Transport infrastructure expanded with road networks growing to 284,772 km and aviation passenger traffic jumping 24%, though rural connectivity gaps persist. Demographics and Labor Population growth slowed slightly to 2.4%, with urban residents now comprising 40.1% of Pakistan's 241.5 million people, while labor force participation remained stagnant at 37.2%, with significant gender disparities. "Our digital transformation is accelerating, but human development needs matching investment," Finance Minister Muhammad Aurangzeb told reporters during the survey's launch. Debt and Capital Markets Pakistan's public debt stood at Rs67.8 trillion (74.1% of GDP) by March 2025, marking a 2.3 percentage point decline from last year's 76.4% debt-to-GDP ratio. Domestic debt comprised 61% of the total at Rs41.4 trillion, while external debt accounted for Rs26.4 trillion. The capital market demonstrated robust growth with market capitalization at the Pakistan Stock Exchange surging 50% to Rs10.2 trillion, while the benchmark KSE-100 index gained 78,000 points during FY2025. Corporate bond issuance increased 38% year-on-year to Rs480 billion. Manufacturing and Mining Manufacturing output showed mixed results, with the industrial sector posting 4.77% growth driven by a recovery in manufacturing. Small-scale manufacturing and slaughtering helped offset contractions in large-scale manufacturing (LSM). The auto sector rebounded strongly with 42% production growth, while cement output declined 7.2%. The mining sector grew 2.1%, with coal production increasing 12% to 10.4 million tonnes. However, mineral exports fell 9% to $682 million due to global price fluctuations. Chromite production dropped 18% while rock salt output grew 5%. The mixed results come ahead of Tuesday's budget announcement, with observers watching for increased allocations to health and education. The survey noted particular challenges in maternal healthcare and secondary school enrollment, where rates continue to lag behind regional peers despite incremental improvements.
Business Recorder
03-06-2025
- Business
- Business Recorder
Advisor highlights agri output decline
PESHAWAR: Advisor to the Chief Minister of Khyber Pakhtunkhwa on Finance and Inter-Provincial Coordination, Muzzammil Aslam stated that according to the federal government, there has been a 15% decline in the production of major crops, which includes a 30% decline in cotton production alone. As a result, an additional five billion dollars will need to be spent on cotton imports. Similarly, due to the drop in wheat production, 3 billion dollars will be spent on wheat imports. Overall, the decrease in agricultural output will force Pakistan to import goods worth $10 billion, representing a loss of Rs2,800 billion to the country and its farmers. He said the government had claimed that the inflation rate was 4.5% or 4.7%, but it is now admitting that inflation will rise to 7.5% next year. Muzzammil Aslam noted that Pakistan's GDP this year was Rs114 trillion, and next year it's expected to increase to Rs129 trillion. Despite this, only Rs1 trillion has been allocated for development expenditures and the federal government is not launching any new projects. Likewise, no new projects have been allocated to the provinces. Of the Rs1 trillion development budget, Rs120 billion is from savings that were not provided as fuel subsidies, which are being used to build roads in Balochistan. This means that the actual Public Sector Development Programme (PSDP) is only Rs880 billion. He further stated that under the 'Uraan Pakistan' programme, discussions were held on sports, water, and the environment, and Rs65 billion was initially allocated to higher education. This has now been slashed to Rs45 billion without any consultation with the provinces. Muzzammil Aslam pointed out that the government had earlier said that projects which are more than 75% complete would be prioritized, yet two road projects in Khyber Pakhtunkhwa that were over 90% complete have been deleted, which he called a clear injustice and raised during today's meeting. He questioned, 'If the government claims inflation is being brought down to 1%, why is the interest rate still at 11%.' He said that Rs2 to 2.5 trillion in savings from interest payments this year should be redirected to development projects but it is not happening. He said that according to the Planning Ministry, 118 development projects have been scrapped, while the government is claiming that the growth rate will be 4.2% next year, with inflation at 7.5%. Exports will not increase significantly, but imports will rise, and $39.5 billion in remittance has been estimated. Copyright Business Recorder, 2025
Business Recorder
17-05-2025
- Business
- Business Recorder
Federal govt is no longer setting wheat prices, pulls plug on Passco
ISLAMABAD: Chaos looms large for Pakistan's wheat farmers as the government told the National Assembly on Friday that it is officially pulling the plug on Passco – the state-run grain procurement giant – and ditching wheat price controls, setting the stage for a free-market frenzy. Responding to a grilling during question hour in National Assembly, Minister for Parliamentary Affairs Dr Tariq Fazal Chaudhry stunned the lawmakers by confirming that the federal government is no longer setting wheat prices – leaving farmers at the mercy of the open market. With wheat now tossed into the jaws of market forces, the once-mighty Pakistan Agricultural Storage and Services Corporation (Passco) is getting the axe – a move the lawmakers on both sides of the aisle slammed, warning it will leave farmers exposed to ruthless middlemen and global grain cartels ready to pounce. Pakistan misses wheat production target 'When the government isn't buying wheat, there's no point in Passco. It's being wound up,' Chaudhry declared, adding that a committee and consultant have been appointed by Prime Minister Shehbaz Sharif to settle the agency's assets 'fairly and transparently.' However, the lawmakers from both the opposition and even the government's own allies especially the PPP didn't buy the sunny spin – slamming the Passco closure and warning it would unleash wheat cartels and wreak havoc on farmers. 'This free-for-all policy is a recipe for disaster,' thundered Pakistan People's Party (PPP) leader Aijaz Hussain Jakhrani, pointing to the chaos that erupted when a previous caretaker regime, led by the then caretaker chief minister of Punjab, Mohsin Naqvi (now moonlighting in the Interior Ministry), had to import wheat, exposing the country's food supply to foreign whims. 'Closing Passco will hurt our farmers. They won't get fair rates in the open market. We need a clear mechanism to support them – not abandon them,' he maintained. Jakhrani wasn't the only one sounding the alarm. PPP's Hina Rabbani Khar – herself from a feudal farming family in Sheikhupura, Punjab – ripped into the government for 'giving relief to European farmers by importing wheat' while leaving Pakistan's own growers in the dust. 'It's clear – this government has no coherent policy for our farmers.' Dr Chaudhary, speaking on behalf of the Ministry for Food Security, tried to douse the fiery debate by tossing out some cold, hard numbers, all while repeatedly assuring the furious lawmakers that axing Passco would ultimately benefit the farmers. He revealed that the cost of growing wheat per acre in 2023-24 shot up to a staggering Rs114,809, while the official support price was stuck at just Rs2,300-2,400 per 40kg – far below what farmers needed to survive. 'That price wasn't just unfair – it was unsustainable,' he admitted. 'So the government backed off, letting market forces take over to ensure farmers get better rates.' He also revealed that a new wheat policy is in the works for next year to attract private investment in the crop supply chain – but whether that will shield small farmers from price shocks remains to be seen. Adding fuel to the fire, the opposition Pakistan Tehreek-e-Insaf's (PTI) Aslam Gumman, a pensioned brigadier-turned-politician from Sialkot, warned that scrapping Passco could invite wheat cartels to corner the market. 'Passco handles billions in procurement. Shutting it down without airtight checks will disrupt supply – and manipulators will jump in,' he warned. Meanwhile, Minister for Water Resources Mueen Wattoo announced that rehabilitation of the Neelum-Jhelum Hydropower project will begin soon, once the final probe into its collapsed tunnels is in. He promised the fixes would be done in two years. Minister for Housing and Works Riaz Hussain Pirzada claimed that housing schemes are being fast-tracked, with public-private partnerships now driving the momentum. And Minister of State for National Health Services Mukhtar Ahmad Malik insisted there's no medicine shortage in the country, adding that generic drug manufacturing is being ramped up to ease the burden on patients' wallets. Copyright Business Recorder, 2025
Business Recorder
17-05-2025
- Business
- Business Recorder
Federal govt is no longer setting wheat prices, NA informed
ISLAMABAD: Chaos looms large for Pakistan's wheat farmers as the government told the National Assembly on Friday that it is officially pulling the plug on Passco – the state-run grain procurement giant – and ditching wheat price controls, setting the stage for a free-market frenzy. Responding to a grilling during question hour in National Assembly, Minister for Parliamentary Affairs Dr Tariq Fazal Chaudhry stunned the lawmakers by confirming that the federal government is no longer setting wheat prices – leaving farmers at the mercy of the open market. With wheat now tossed into the jaws of market forces, the once-mighty Pakistan Agricultural Storage and Services Corporation (Passco) is getting the axe – a move the lawmakers on both sides of the aisle slammed, warning it will leave farmers exposed to ruthless middlemen and global grain cartels ready to pounce. Pakistan misses wheat production target 'When the government isn't buying wheat, there's no point in Passco. It's being wound up,' Chaudhry declared, adding that a committee and consultant have been appointed by Prime Minister Shehbaz Sharif to settle the agency's assets 'fairly and transparently.' However, the lawmakers from both the opposition and even the government's own allies especially the PPP didn't buy the sunny spin – slamming the Passco closure and warning it would unleash wheat cartels and wreak havoc on farmers. 'This free-for-all policy is a recipe for disaster,' thundered Pakistan People's Party (PPP) leader Aijaz Hussain Jakhrani, pointing to the chaos that erupted when a previous caretaker regime, led by the then caretaker chief minister of Punjab, Mohsin Naqvi (now moonlighting in the Interior Ministry), had to import wheat, exposing the country's food supply to foreign whims. 'Closing Passco will hurt our farmers. They won't get fair rates in the open market. We need a clear mechanism to support them – not abandon them,' he maintained. Jakhrani wasn't the only one sounding the alarm. PPP's Hina Rabbani Khar – herself from a feudal farming family in Sheikhupura, Punjab – ripped into the government for 'giving relief to European farmers by importing wheat' while leaving Pakistan's own growers in the dust. 'It's clear – this government has no coherent policy for our farmers.' Dr Chaudhary, speaking on behalf of the Ministry for Food Security, tried to douse the fiery debate by tossing out some cold, hard numbers, all while repeatedly assuring the furious lawmakers that axing Passco would ultimately benefit the farmers. He revealed that the cost of growing wheat per acre in 2023-24 shot up to a staggering Rs114,809, while the official support price was stuck at just Rs2,300-2,400 per 40kg – far below what farmers needed to survive. 'That price wasn't just unfair – it was unsustainable,' he admitted. 'So the government backed off, letting market forces take over to ensure farmers get better rates.' He also revealed that a new wheat policy is in the works for next year to attract private investment in the crop supply chain – but whether that will shield small farmers from price shocks remains to be seen. Adding fuel to the fire, the opposition Pakistan Tehreek-e-Insaf's (PTI) Aslam Gumman, a pensioned brigadier-turned-politician from Sialkot, warned that scrapping Passco could invite wheat cartels to corner the market. 'Passco handles billions in procurement. Shutting it down without airtight checks will disrupt supply – and manipulators will jump in,' he warned. Meanwhile, Minister for Water Resources Mueen Wattoo announced that rehabilitation of the Neelum-Jhelum Hydropower project will begin soon, once the final probe into its collapsed tunnels is in. He promised the fixes would be done in two years. Minister for Housing and Works Riaz Hussain Pirzada claimed that housing schemes are being fast-tracked, with public-private partnerships now driving the momentum. And Minister of State for National Health Services Mukhtar Ahmad Malik insisted there's no medicine shortage in the country, adding that generic drug manufacturing is being ramped up to ease the burden on patients' wallets. Copyright Business Recorder, 2025
