ISLAMABAD: Pakistan’s economy has made a remarkable recovery, reaching a $411 billion GDP milestone for the fiscal year 2025, driven by IMF-backed reforms, robust industrial growth, and record investor confidence.
Finance Minister Senator Muhammad Aurangzeb announced the achievement on Monday, marking a historic turning point in the country’s economic trajectory.
At the launch of the Economic Survey of Pakistan 2024–25, the Finance Minister highlighted that real GDP grew by 2.68%, with industrial activity rebounding by 4.8%.
This growth resulted in the economy surpassing the $400 billion mark for the first time in the country’s history, while per capita income increased to $1,824.
Aurangzeb was accompanied by key officials, including Finance Secretary Imdad Ullah Bosal, Economic Advisor Dr. Raja Hasan M. Mohsin, and Adviser to Finance Minister Khurram Shehzad.
Together, they detailed the significant strides made in stabilizing the economy, noting that inflation had dropped to a historic low of 0.3% in April 2025. This was attributed to stable exchange rates, a tight monetary policy, and improved food supply. Additionally, Pakistan posted a $1.9 billion current account surplus, and foreign exchange reserves rose to $16.64 billion.
The country’s fiscal consolidation efforts led to a reduction in the fiscal deficit to 2.6% of GDP for the period from July to March, with a notable 25.9% increase in FBR tax collections.
The central bank’s decision to cut the policy rate from 22% to 11% helped ease inflationary pressures, contributing to a 52% surge in the KSE-100 index. Both Fitch and Moody’s upgraded Pakistan’s credit ratings, reflecting strengthened economic fundamentals.
In a landmark achievement, Pakistan posted its first fiscal surplus in 24 years, amounting to Rs 1,896 billion (1.7% of GDP) in the first quarter of FY2025. This was bolstered by reforms in provincial tax mobilization, an updated National Fiscal Pact, and GST rationalization.
The government also made significant strides in energy diversification, with the country’s installed power capacity reaching 46,605 MW. In education, Rs 61.12 billion was allocated to the Higher Education Commission (HEC), and literacy rates climbed to 60.65%, with urban areas achieving 74.09% literacy.
The Benazir Income Support Programme (BISP) expanded further, disbursing Rs 598.72 billion in FY2025, reaching nearly 8 million beneficiaries. Pakistan also launched its first carbon market policy and secured $1.4 billion from the IMF’s Resilience and Sustainability Facility (RSF) to fund climate resilience projects like Recharge Pakistan.
The digital economy showed impressive growth, with ICT exports rising by 23.7% to $2.8 billion, driven by a $2.43 billion trade surplus. The country’s thriving startup ecosystem saw over 1,900 startups supported by National Incubation Centers, generating 185,000 jobs and attracting Rs 30.8 billion in investments.
The Finance Minister highlighted the difficult journey that led to the recovery, noting the severe challenges faced in FY2023, including a 0.2% GDP contraction, industrial output shrinkage, and a record-high inflation rate of 29.2%. However, the government’s swift implementation of structural and policy reforms, including completing the IMF Standby Arrangement (SBA), played a pivotal role in stabilizing the economy.
Looking ahead, global economic trends indicate a slowdown, with global GDP projected to grow by 2.8% in 2025. However, Pakistan’s key trading and remittance partners, including Saudi Arabia, UAE, China, and the United States, are expected to maintain positive growth, which will further support Pakistan’s exports and remittance inflows.
Summing up, Aurangzeb emphasized that structural reforms, fiscal discipline, and strategic policy interventions had laid a strong foundation for continued recovery, positioning Pakistan for sustained economic growth and long-term stability.
