Pakistan’s economy has shown significant improvement in the first half of the fiscal year 2024-25, with GDP expanding by 2.5%, according to a report released by the Finance Ministry on Monday. Finance Minister Ishaq Dar attributed the positive momentum to sound macroeconomic management, effective inflation control, and improved fiscal and external account stability.
“Pakistan is on a path to economic recovery thanks to comprehensive policy reforms and targeted strategies to stabilize the economy,” Dar said during a press briefing.
The report revealed that inflation dropped to 7.2% in the first half of FY2025, a stark contrast to the 28.8% inflation recorded in 2023-24. The decline is attributed to a stable exchange rate, falling global commodity prices, and targeted government interventions.
The agricultural sector posted robust growth of 6.2%, supported by increased investment, favorable weather conditions, and higher agricultural credit. The industrial sector showed mixed results, with notable improvements in the textile industry. Meanwhile, the services sector continued its upward trend, buoyed by recovering domestic activity and growth in trade.
Foreign Direct Investment (FDI) surged by 20%, particularly in the power and oil sectors. The current account balance also recorded a surplus of $1.21 billion in the July-December period of FY2025. Pakistan’s foreign exchange reserves now cover more than two months of imports, bolstered by IMF disbursements and international assistance.
Additionally, the Pakistani rupee appreciated by 1.2% during the same period, signaling favorable external developments. The fiscal deficit was reduced to 0.04% of GDP in July-November FY2025, a marked improvement compared to the previous year.
“This growth is a testament to the resilience of the Pakistani economy. With declining inflation, enhanced investor confidence, and stable economic fundamentals, we are optimistic about sustained growth for the remainder of the fiscal year,” the finance minister added.
The Finance Ministry concluded that Pakistan is well-positioned to continue its growth trajectory, with strengthened economic indicators and policy measures providing a solid foundation for sustainable development.
