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Business Recorder
a day ago
- Business
- Business Recorder
Platform set for further growth: Experts weigh in on Pakistan Economic Survey 2024-25
The government, on Monday, a day before the federal budget is unveiled, released its much-awaited Pakistan Economic Survey 2024-25, which showed Pakistan's economy is expected to grow 2.7% in the fiscal year ending June 2025. Pakistan has provisionally recorded real GDP growth of 2.68% during FY25, missing the growth target of 3.6%, against 2.51% recorded in FY24. Talking to Business Recorder, economic analysts weigh in on Pakistan's economic performance during the outgoing fiscal. 'The economy moved in the right direction during the outgoing fiscal,' Waqas Ghani, Head of Research at JS Global, told Business Recorder. 'Services sector, which has a 58% share in GDP, contributed the most with 2.91% growth in FY25,' he said. On the other hand, agriculture posted modest growth of 0.56% in FY25, led by a 4.72% rise in livestock. However, major crops declined by 13.49% due to lower cultivation and weather challenges. The industry expanded by 4.77%, supported by small-scale manufacturing and slaughtering. The large-scale manufacturing (LSM) contracted by 1.5% amid high costs and supply constraints. 'The economy has stabilised in the outgoing fiscal, which has provided a platform set for further growth,' said Samiullah Tariq, Head of Research at Pak-Kuwait Investment Company. Meanwhile, Topline Securities, a brokerage house, believed that the GDP growth 'will be revised down, especially due to enlarged growth numbers of the industrial segment at 4.77% compared to actual growth in 9MFY25 at -1%'. Overseas Pakistanis help country post historic current account surplus of $1.9bn in 10MFY25 Islamabad is also targeting a GDP growth of 4.2% for the financial year 2025-26. 'The target is achievable if Pakistan remains steadfast in its reforms and follows the IMF programme,' Samiullah added. In another key development, Pakistan reported a current account surplus of $1.9 billion during the first ten months of the financial year 2024-25, marking a major turnaround from the $1.3 billion deficit recorded in the same period last year, according to the survey. 'This is a very positive development, and we expect the country to reach primary surplus in the upcoming fiscal year as well,' said Ghani. Moreover, tax collection also improved considerably in FY25, the finance minister informed that the number of individual filers doubled to 3.7 million, whereas the number of high-value filers jumped by 178% during the outgoing fiscal. 'Although the increase in tax collection is good, we need further rationalisation,' he added.
Gulf Today
27-01-2025
- Business
- Gulf Today
Pakistan central bank cuts key rate by 100 bps to 12 per cent
Pakistan's central bank cut its key policy rate by 100 basis points to 12 per cent on Monday, for a sixth straight reduction since June as the country attempts to revive business and economic sentiment amid easing inflation. The State Bank of Pakistan has slashed rates by 1,000 bps from an all-time high of 22 per cent in June 2024, one of the most aggressive moves among central banks in emerging markets and exceeding its 625 bps of rate cuts in 2020 during the COVID-19 pandemic. The bank's governor Jameel Ahmad said at a press conference that the inflation rate would ease further in January but noted core inflation remained elevated. He said the forecast for full-year inflation in the year to June was an average of 5.5 per cent-7.5 per cent. 'Considering these developments and evolving risks, the Committee viewed that a cautious monetary policy stance is needed to ensure price stability, which is essential for sustainable economic growth,' the bank's monetary policy committee (MPC) said in a statement accompanying the decision. 'In this regard, the MPC assessed that the real policy rate needs to remain adequately positive on a forward-looking basis to stabilise inflation in the target range of 5 - 7 per cent.' Fourteen of 15 analysts surveyed by Reuters expected the central bank to cut its key rate by at least 100 bps mainly due to a drop in inflation. Pakistan's consumer inflation rate slowed to an over 6-1/2-year low of 4.1 per cent in December, largely due to a high year-ago base. That was below the government's forecast and significantly lower than a multi-decade high of around 40 in May 2023. Pakistan's economy grew 0.92 per cent in the first quarter of fiscal 2024-25 which ends in June, according to data approved by the National Accounts Committee, and released by its Statistics Bureau in December. The governor said the bank maintained its forecast of full-year GDP growth at 2.5 per cent-3.5 per cent. Meanwhile Pakistan's consumer inflation rate slowed to 4.1 per cent year on year in December, the statistics bureau said, the lowest in more than 6-1/2 years. The South Asian country is navigating a challenging economic recovery path buttressed by a $7 billion facility from the International Monetary Fund (IMF) granted in September. Consumer prices in December rose 0.1 per cent from the month before, according to the Pakistan Bureau of Statistics. In its monthly report released last week, the finance ministry said that the annual inflation rate was expected to hold in the range of 4-5 per cent in the final month of the year. Annual inflation had already slowed to 4.9 per cent in November, largely due to a high base a year earlier, coming in below the government's forecast and significantly lower than a multi-decade high of around 40 per cent in May 2023. 'Inflation has come down on the back of stable currency, lower global commodity prices and improved supply chain,' said Samiullah Tariq, head of research and development at Pak Kuwait Investment Company. Pakistan's central bank previously targeted 5-7 per cent inflation in the medium term but its head has said the level is now in sight within the next 12 months. The State Bank of Pakistan (SBP) cut its key policy rate by 200 basis points to 13 per cent in December, the fifth straight reduction since June, to bring cumulative rate cuts for 2024 to 900 basis points and making it one of the most aggressive emerging market central banks in the current easing cycle. KARACHI: Pakistan's consumer inflation rate slowed to 4.1 per cent year on year in December, the statistics bureau said, the lowest in more than 6-1/2 years. The South Asian country is navigating a challenging economic recovery path buttressed by a $7 billion facility from the International Monetary Fund (IMF) granted in September. Consumer prices in December rose 0.1 per cent from the month before, according to the Pakistan Bureau of Statistics. In its monthly report released last week, the finance ministry said that the annual inflation rate was expected to hold in the range of 4-5 per cent in the final month of the year. Annual inflation had already slowed to 4.9 per cent in November, largely due to a high base a year earlier, coming in below the government's forecast and significantly lower than a multi-decade high of around 40 per cent in May 2023. 'Inflation has come down on the back of stable currency, lower global commodity prices and improved supply chain,' said Samiullah Tariq, head of research and development at Pak Kuwait Investment Company. Pakistan's central bank previously targeted 5-7 per cent inflation in the medium term but its head has said the level is now in sight within the next 12 months.
