Pakistan’s economy is expected to grow by 2.7% in the 2025 financial year, according to the Economic Survey shared just before the federal budget announcement. The government had earlier targeted 3.6% growth, but this was lowered last month.
Finance Minister Muhammad Aurangzeb said the economy is slowly stabilizing, and investor confidence is improving. The International Monetary Fund (IMF) also predicted a similar 2.6% growth for FY2025 and expects it to increase to 3.6% in FY2026. To support growth, the State Bank of Pakistan has cut interest rates significantly from 22% to 11%.
There are signs of progress. Pakistan recorded a current account surplus of $1.9 billion from July to April, compared to a $200 million deficit during the same period last year. Tax revenue collection reached Rs13.37 trillion in the first nine months of the fiscal year. However, the government is still running a fiscal deficit of 2.6% of GDP.
Looking ahead, Pakistan hopes to achieve medium-term growth of 5.7%. This target is based on planned economic reforms, more foreign investment, and increased domestic savings. The government is aiming to create a business-friendly environment to support this growth.
While challenges remain, the Economic Survey gives a sense of cautious hope. With continued support from the IMF and other international partners, Pakistan is trying to move towards a more stable and growing economy as it prepares for the FY2025 budget.
