In a year shaped by delicate political transitions, post-crisis stabilisation, and cautious fiscal manoeuvring, Pakistan’s economy appears to be catching its breath. According to the Economic Survey for FY 2024–25, the country posted a 2.7% real GDP growth rate, missing its initial target of 3.6%. The reasons are well-documented: disappointing performance in agriculture and large-scale manufacturing, fragile domestic demand, and supply-side bottlenecks.

But beyond the missed target lies a deeper story: the return of macroeconomic composure. Stabilised inflation, a surprising current account surplus, improved foreign exchange reserves, and declining public debt collectively form a picture of renewed financial confidence. Whether this momentum can be converted into sustainable growth, however, remains the pressing question.

After enduring two consecutive years of economic distress marked by a steep depreciation of the rupee, double-digit inflation exceeding 26%, and dwindling foreign reserves, Pakistan has managed to engineer a semblance of macroeconomic calm. The State Bank of Pakistan brought the benchmark policy rate down to 11%, reflecting significant disinflationary progress. Inflation currently hovers around 4.6–4.7%, aided by administrative controls, currency stabilisation, lower commodity prices, and better food supply chain management. Crucially, the country achieved a $1.9 billion current account surplus between July and April 2024–25—an astonishing reversal from last year’s $200 million deficit. This surplus was made possible by booming remittances, which hit a record $34.9 billion, alongside tightened controls on non-essential imports.

Fiscal indicators also show improvement. Pakistan’s public debt-to-GDP ratio has fallen from 68% to 65%, and the consolidated fiscal deficit is projected to........

© Daily Pakistan