The State Bank of Pakistan (SBP) stated on Thursday that the improvement in Pakistan’s macroeconomic conditions in FY24 is anticipated to continue in FY25 as well. The SBP predicted real GDP growth for fiscal 2025 of 2.5 to 3.5%, which is less than the government’s 3.6% objective.
According to the central bank’s annual report, stabilization efforts, productive interactions with the International Monetary Fund (IMF), less uncertainty, and a favorable global economic climate helped Pakistan’s macroeconomic circumstances improve in FY24, coming in at 2.5%.
As per the Annual Report 2023-2024 (The State of Pakistan’s Economy), “the rise in local agricultural productivity also caused relatively better economic results during the year.”
Citing record wheat and rice harvests as well as a resurgence in cotton output, the real GDP reported a moderate agriculture-led increase in FY24.
According to the research, inflation decreased from its highest point of 38% in May 2023 to 12.6% in June 2024. It stated that the SBP was able to lower the benchmark interest rate by 150 basis points to 20.5% in June 2024 due to a steady drop in headline and core inflation in the second half of FY24.
The SBP emphasizes that maintaining macroeconomic stability is nevertheless hampered by a number of structural issues.
“The economy’s growth potential continues to be constrained by declining investment due to low savings, an unfavorable business environment, a lack of research and development, low productivity, and climate change risks,” the statement stated.
The long-standing inefficiencies in the nation’s energy industry, which have led to the building of circular debt, are specifically highlighted in the study.
