Pakistan targets economic revival with 3.6 per cent GDP growth for FY25

WEB DESK: Pakistan has set an ambitious GDP growth target of 3.6 per cent for the Fiscal Year 2024-25, according to data released by the Annual Plan Coordination Committee (APCC). This target marks a notable increase from the provisional growth of 2.38 per cent seen in the ongoing fiscal year.

The APCC, in its review of the proposed annual plan for FY 2024-25, highlighted a positive economic outlook for the coming year.

However, the growth prospects are contingent upon several critical factors, including political stability, exchange rate fluctuations, macroeconomic stabilization under the International Monetary Fund (IMF) program, and an anticipated 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 per cent growth in the agriculture sector for FY 2024-25, taking into account the high base effect from the previous year.

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

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

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

Fiscal deficit is anticipated to narrow due to fiscal consolidation measures, while domestic inflation is expected to moderate to 12 per cent in light of 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, the achievement of the set targets will depend on key factors including political stability, exchange rate management, and favourable global economic conditions.

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