News And Updates

 

Pakistan’s Economy in 2025: Signs of Recovery Amid Global and Domestic Challenges

Date: May 26, 2025
Pakistan Economy, GDP Growth, Economic Outlook 2025, Recovery, Investment Opportunities

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Economic Growth Accelerates Modestly in FY2024–25

Pakistan's economy recorded a 2.68% growth rate in the fiscal year 2024–25 — a clear improvement from the 0.3% growth seen in FY2023–24. While this fell short of the 3.6% target, the overall direction points to growing stability and resilience in the country’s economic fundamentals.

This upward trend reflects better fiscal management, stabilizing inflation, and the beginnings of investor confidence returning to key sectors.

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Sectoral Recovery Gains Momentum

Several core sectors began to rebound:

• Agriculture benefited from timely policy support and slightly improved water availability.

• Industry witnessed modest growth due to more consistent energy supply and local demand revival.

• Services sector, especially tech and finance, maintained positive momentum, adding strength to overall GDP.

These green shoots offer encouraging signs that the economy is gradually regaining its footing.

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International Confidence Returning

Global institutions have acknowledged this upward trend, revising their outlooks positively compared to last year:

Institution	FY2023–24 GDP	FY2024–25 Forecast
World Bank	0.3%	2.7%
Asian Development Bank	0.4%	2.5%
United Nations	0.5%	2.3%

These figures reflect growing global confidence in Pakistan’s policy reforms and macroeconomic management.

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Reforms Beginning to Take Effect

Some of the key improvements driving this growth trajectory include:

• Improved inflation control through tighter monetary policy.

• Widening the tax base and reducing fiscal leakages.

• Policy incentives in sectors like mining, IT, and energy to attract foreign investment.

The government’s engagement with the IMF and support from multilateral institutions have also helped strengthen Pakistan’s economic credibility.

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Positive Momentum — But More Work Ahead

While 2.68% growth may seem modest, it's a significant turnaround from the near-stagnation seen just a year ago. The positive momentum now depends on how consistently the country can:

• Continue implementing economic reforms,

• Support private-sector growth, and

• Improve governance, especially in tax and energy sectors.

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Outlook: Cautiously Optimistic

Pakistan is on a slow but steady path toward recovery. While external risks and domestic challenges remain, the fundamentals are improving. With consistency and bold decision-making, Pakistan has the potential to transition from stabilization to sustained growth in the years ahead.

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References

1. World Bank: Pakistan needs structural reforms for inclusive growth – World Bank News

2. ADB forecasts 2.5% GDP growth for Pakistan in FY2025 – Asian Development Bank

3. UN Economic and Social Survey for Asia and the Pacific 2025 – Dawn News Summary

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