Pakistan’s GDP Grows 3.04% with Lower Fiscal Deficit

ISLAMABAD: Pakistan’s economy grew by 3.04% in FY2024–25, according to revised estimates endorsed by the 114th meeting of the National Accounts Committee (NAC), chaired by the Secretary of the Ministry of Planning, Development and Special Initiatives at the Pakistan Bureau of Statistics (PBS).

The NAC reviewed updated quarterly and annual Gross Domestic Product (GDP) figures, revealing that Pakistan’s economy reached Rs113.7 trillion, equivalent to US$407.2 billion, a significant jump from US$371.8 billion in the prior fiscal year. Per capita income rose to US$1,812 (Rs506,188).

Officials described the growth as a “gradual but sustained recovery,” with GDP expanding from 1.8% in Q1 to a robust 5.66% in Q4, marking the highest quarterly growth in recent years. This rebound was driven by enhanced energy supply, revitalized manufacturing and construction, steady services growth, and easing inflationary pressures.

Sectoral Performance

Agriculture: The agriculture sector recorded a modest 1.51% growth. Despite a 13.12% decline in major crops like wheat and cotton, the sector was buoyed by a 19.9% surge in minor crops, including vegetables, fruits, and fodder. Livestock grew by 3.72%, forestry by 3.01%, and fishing by 0.97%, signaling stability in the rural economy.

Industry: The industrial sector led with a 5.26% expansion, up from 4.77% the previous year. Construction grew by 6.63%, while electricity, gas, and water supply soared by 28.53%, fueled by improved generation and subsidies. Large-Scale Manufacturing (LSM) saw a minimal 0.69% contraction, a marked recovery from prior double-digit declines.

Services: Contributing over half of Pakistan’s GDP, the services sector expanded by 3.0%, propelled by financial and insurance activities (3.9%), transport and storage (2.7%), and public administration and social security (9.88%), reflecting increased government spending and enhanced logistics.

Macroeconomic Indicators

NAC data indicated that national savings stood at 13.1% of GDP, while the investment-to-GDP ratio improved to 13.6% in FY2024–25, supported by stable remittance inflows and moderate import growth.

Inflation, measured by the Consumer Price Index (CPI), averaged 12.6%, a significant drop from the previous year’s 21.2%, bolstered by improved agricultural supply and currency stability, which enhanced real income levels.

The fiscal balance showed consolidation, with the fiscal deficit contained at 6.3% of GDP, driven by higher tax collection and restrained non-development expenditures.

On the external front, the current account deficit narrowed to US$1.4 billion (0.3% of GDP), attributed to reduced imports and a robust recovery in exports and remittances. Foreign exchange reserves climbed to US$9.5 billion, covering over two months of import needs.

Quarterly GDP Trends

PBS data outlined a progressive GDP growth trajectory for FY2024–25:

• Q1: 1.80%
• Q2: 2.41%
• Q3: 2.83%
• Q4: 5.66%

Officials hailed this upward trend as evidence of returning macroeconomic stability, driven by consistent fiscal discipline and policy continuity.

PBS and Planning Ministry praised the improved data collection and quarterly revision framework, crediting enhanced coordination among PBS, the Ministry of Finance, and the State Bank of Pakistan for delivering more reliable and timely national accounts.

The NAC emphasized that sustaining this recovery hinges on continued macroeconomic stability, export diversification, industrial competitiveness, and structural reforms under the government’s medium-term growth strategy. Officials concluded that the revised estimates signal the onset of a recovery phase, with potential for higher, sustained growth through consistent policy execution.