Pakistan Sets 3.6% GDP Growth Target for Economic Revival in FY25

Islamabad: Pakistan has set an ambitious GDP growth target of 3.6 percent for the Fiscal Year 2024-25, according to data from the Annual Plan Coordination Committee (APCC).

This target represents a significant increase from the provisional growth rate of 2.38 percent in the current fiscal year.

The APCC's review of the proposed annual plan for FY 2024-25 highlights a positive economic outlook. However, the growth prospects depend on several critical factors, including political stability, exchange rate fluctuations, macroeconomic stabilization under the International Monetary Fund (IMF) program, and an expected decline in global oil and commodity prices.

The Planning Commission’s document, as reported by the state-owned Associated Press of Pakistan (APP), forecasts a 2 percent growth in the agriculture sector for FY 2024-25, considering the high base effect from the previous year.

The industrial sector is expected to recover with a targeted growth of 4.4 percent, driven by an anticipated 3.5 percent increase in Large Scale Manufacturing (LSM). This sector’s resurgence is attributed to improved input and energy supplies, aided by the anticipated decrease in global oil and commodity prices.

The services sector is projected to grow by 4.1 percent, supported by a 3.1 percent growth in commodity-producing sectors.

Additionally, the investment-to-GDP ratio is expected to rise from 13.1 percent in 2023-24 to 14.2 percent in 2024-25, driven by economic recovery, an improved business environment, and political stability. National savings are targeted to reach 13.3 percent of GDP.

Fiscal deficit is anticipated to narrow due to fiscal consolidation measures, while domestic inflation is expected to moderate to 12 percent in response to falling global inflation.

The committee also reviewed the annual plan for FY 2023-24, noting that Pakistan’s economy faced significant challenges at the beginning of the fiscal year, largely due to the lingering effects of the previous year’s economic disruptions.

In summary, while Pakistan’s economic outlook for FY 2024-25 is positive, achieving the set targets will depend on key factors including political stability, exchange rate management, and favorable global economic conditions.