ISLAMABAD (Kashmir English): Pakistan’s Finance Minister Muhammad Aurangzeb Monday said that measures taken by the government throughout the year led to a “gradual recovery” as he unveiled the Pakistan Economic Survey 2024-25.
The survey is a pre-budget document that carries details of socio-economic performance during the outgoing financial year.
Every year, the significant document is presented a day ahead of the annual federal budget which will be presented tomorrow (Tuesday).
Speaking during a press conference in Islamabad, the finance minister talked about the world economic outlook, noting that global GDP growth was estimated to decline to 2.8pc in 2025 from 3.5pc two years ago. “Our recovery needs to be looked at in a global context,” he said.
The minister said that Pakistan’s GDP growth in 2023 was -0.2pc, which rose to 2.5pc in 2024. “This year, we announced a 2.7pc growth for 2025. This is a gradual recovery and the right way to go about it is to focus on sustainable growth.
“The last thing we want is to go through another round of boom-and-bust cycles,” Aurangzeb stressed.
Talking about inflation, he termed it a fantastic story for Pakistan: 6.8pc global inflation in 2023, 5.7pc in 2024 and the estimate for 2025 is 4.3pc in terms of CPI inflation.
He noted that the Consumer Price Index (CPI) had crossed 29pc in 2023 but now had plunged to just 4.6pc. “So, I think we’ve moved in the right direction in terms of the global figures.”
About the country’s monetary policy, the finance minister said that the interest rate was at a record 22pc in 2023, following which “steps were taken” to reduce it, and now the key policy rate stood at 1,100 basis points, he said.
Macroeconomic indicators
Talking about macroeconomic indicators, the finance minister said that public debt and debt-to-GDP ratio was 68pc, which is now 65pc.
“Forex reserves as of June 30, 2024, were $9.4bn, which was a huge and remarkable recovery from where we were back in 2023, where we were down to two weeks of import cover. The recovery after [June] 30 continued and we consolidated it in 2024-25.”
Talking about the IMF loan, Finance Minister Aurangzeb asserted, “Our credibility and trust was re-established under Prime Minister Shehbaz Sharif’s leadership.”
Noting that the premier had signed the Stand-by Arrangement before the caretaker administration took over, the minister also praised the efforts of caretaker finance minister Dr Shamshad Mirza as her “discipline allowed us to continue”.
Aurangzeb then presented two reasons for Pakistan desiring an Extended Fund Facility with the IMF, with the first one aiming to “bring permanence to macroeconomic stability” and remove fragility.
The second reason, he added, was to continue with structural reforms. “We needed to fundamentally change the economy’s DNA, and for that, we needed structural reforms which are elusive in this country. We needed to proceed with a structured programme,” he said.
On revenue, the finance minister said that the country’s tax-to-GDP has hit a five-year high and the PM is leading this personally. This whole transformation is around people, processes, and technology, he added.
Aurangzeb also highlighted that industrial and household energy tariffs had been slashed, while private sector and professional boards were introduced for power distribution companies.
The finance minister said that resolving the Rs1.275tr circular debt would play an important role.
The finance minister also vowed to implement with renewed vigour and energy the government’s decision to privatise 24 SOEs by next year.
The Federal Budget for fiscal year 2025-26 will be presented in the National Assembly tomorrow.
Finance Minister Muhammad Aurangzeb will present the budget in the House at 5:00 in the evening.
