Pakistan's Economic Prospects Amid Budget Unveiling

The economic survey highlights Pakistan's expected GDP growth of 2.7% for FY25, down from an initial target of 3.6%. With an optimistic outlook for the next fiscal year, the government aims for 4.2% growth amid challenges such as defense expenditures and macroeconomic stabilization under an IMF program.

As Pakistan's federal budget is set to be unveiled, the government's economic survey reveals a projected GDP growth of 2.7% for the fiscal year ending in June 2025. This estimation is a reduction from the previously targeted 3.6% and follows a 2.5% growth in the previous fiscal year.

Efforts by Prime Minister Shehbaz Sharif's administration to stimulate economic growth include aiming for a 4.2% GDP expansion in the next fiscal year. This ambition is amid various challenges, such as stimulating investment, managing defense spending, and sustaining a primary surplus amid strained relations with India.

Pakistan's central bank has played a role by reducing its policy rate to 11% after a significant cut exceeding 1,000 basis points in the current year. Meanwhile, the country experienced a notable current account surplus of $1.9 billion, contrasting with a deficit last year, although maintaining macroeconomic stability remains crucial under the ongoing $7 billion IMF program.

(With inputs from agencies.)