Islamabad: Pakistan’s economic growth has shown signs of recovery in the fiscal year 2024, primarily fueled by an increase in domestic consumption due to higher agricultural income and workers’ remittances.
According to Asian Development Bank, Pakistan’s gross domestic product (GDP) growth is estimated to have increased to 2.4% in FY2024 and is projected to rise further to 2.8% in FY2025. The report emphasizes the importance of steadfast economic reforms for the sustainability of growth and macroeconomic stability, despite the presence of potential risks.
ADB Country Director for Pakistan, Yong Ye, stressed the critical nature of continuous policy reforms to stabilize the economy and enhance fiscal conditions. “Pakistan’s economic prospects are closely tied to the steadfast and consistent implementation of policy reforms to stabilize the economy and rebuild fiscal and external buffers,” Ye said. He underscored the need for Pakistan to consolidate public finances, expand social spending and protection, reduce fiscal risks from state-owned enterprises, and enhance the business environment to stimulate private sector-led growth.
The report also noted a projected slowdown in agriculture in FY2025, while other sectors may see growth if macroeconomic conditions improve, providing easier access to foreign exchange, benefiting both manufacturing and services sectors.
Inflation rates, which peaked at 29.2% in FY2023, slowed down to 23.4% in FY2024, with a significant decrease in food price inflation due to increased agricultural production. The ADB forecasts a further decline in inflation to 15% in FY2025, supported by a well-regulated monetary policy and reduced exchange rate volatility.
The Asian Development Bank, founded in 1966 and comprising 68 member countries, continues its mission to foster a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while focusing on eradicating extreme poverty.