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Tuesday, 10 June, 2025 I 13 Zilhaj, 1446
Rs 50.00 | Vol XV No 332 I 40 Pages I Islamabad Edition
PAKISTAN MISSES GROWTH TARGET, BUT IS THE ECONOMY ON THE RISE? ECONOMIC SURVEY
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SURVEY REVEALS MISSED TARGETS, INFLATION RELIEF, AND CAUTIOUS Economic Survey: PTI accuses govt for ‘mismanaging’ OPTIMISM AHEAD. FINMIN ADAMANT ON STAYING THE COURSE
economy, calls GDP growth ‘fabricated’
PROFIT
ISLAMABAD
SHAHNAWAZ ALI
AKISTAN’s economy registered a growth rate of 2.68% in FY2025, falling short of its original 3.6% target but signalling a return to relative macroeconomic stability after years of turbulence, according to the Economic Survey 2024-25 unveiled by Finance Minister Muhammad Aurangzeb on Monday. The economy is reported to have grown up from a contraction of 0.2 percent the previous year. While this marks a reversal in trend, the base effect from last year’s downturn raises questions about the robustness of the rebound. The growth composition is shaped by gains in agriculture, services, and limited industrial pick-up. Policymakers cite macroeconomic stabilisation, a narrowing current account deficit, and lower inflation as contributing factors. The fiscal narrative remains anchored to the IMF’s Extended Fund Facility (EFF), with the first review completed and further tranche disbursements made. The impact of this agreement continues to shape both budgetary choices and monetary policy decisions, particularly through fiscal consolidation, reduced subsidies, and adjustments to utility pricing. The survey gives a sobering global assessment: It mentions that the global GDP growth is projected to ease to 2.8% in 2025, down from 3.3% in 2024, with headline inflation still elevated at 5.7%, though easing. Structural drags—from tariffs and weak demand to geopolitical frictions—have upended investment sentiment and reshaped trade flows. Within this uncertain global landscape, Pakistan’s 2.68% GDP growth is framed by the government as a “gradual but rightpaced” recovery. The Survey attributes this progress to a cocktail of policies: fiscal tightening, monetary discipline, and exter-
STAFF REPORT
nal account consolidation, all under the umbrella of IMF-led reform. While answering to questions from journalists, Finance minister Muhammad Aurangzeb stated that, " We just want to stay the course in terms of macroeconomic stability as the reform agenda is already underway." Let us look at the economic data provided in the survey to see how much truth there is to these claims of reform and sustainable growth. Activity in the Capital Market The capital markets recorded significant index-level gains, with the KSE-100 rising 50.2 percent during July–March FY25. Market capitalisation grew by over Rs 4 trillion, reaching Rs 14.4 trillion by end-March. According to the economic survey, this uptick is linked with investor anticipation around IMF-led reforms, lower policy rates, and falling inflation. The Pakistan Mercantile Exchange also showed heightened turnover in commodity contracts — 5.88 million lots worth Rs 6.54
trillion — though much of this remains speculative and detached from real sector trade. In the Islamic finance space, 38 new Shariah-compliant securities were certified, and their market capitalisation now accounts for nearly two-thirds of PSX’s total. Nonetheless, questions remain over the depth and breadth of the equity rally, as a substantial portion of trading remains concentrated in a few sectors. Moreover, net foreign portfolio investment continues to exhibit volatility, and domestic institutional participation drives most of the current momentum. Inflation Declines The Consumer Price Index (CPI) inflation fell markedly during FY25, reaching a low of 0.3 percent in April and averaging 4.7 percent over July–April, compared to 26.0 percent in the same period last year. Sensitive Price Index (SPI) and Wholesale Price Index (WPI) also showed sharp declines. While these numbers indicate disinflation, the mechanism behind this remains unclear. Reports point to administrative price controls, temporary relief schemes,
Erdogan reiterates his country’s support to Pakistan on key issues ISLAMABAD
STAFF REPORT
Turkiye’s President Recep Tayyip Erdogan has reiterated his country’s resolute support to Pakistan on key issues. Turkiye’s president discussed several issues with Prime Minister Shehbaz Sharif during a telephonic conversation between them. Both countries also agreed to expedite implementation on the key decisions taken in recent meetings between Pakistan PM and Turkiye’s President during this year. PM said this would help accelerate bilateral cooperation, particularly in trade and investment. During the conversation, Prime Minister conveyed warm greetings and best wishes to the Turkish President, as well as to the brotherly
people of Turkiye, on the auspicious occasion of Eid-ul-Adha. While recalling their recent meetings in Istanbul and Lachin, the Prime Minister thanked President
Erdogan once again for Turkiye’s strong and unwavering support to Pakistan during the recent PakistanIndia crisis. He said this gesture has won the hearts of the people of Pakistan and added another glorious chapter to the history of PakistanTurkiye brotherhood. Both leaders reaffirmed their unflinching support to each other on their core interests. They also discussed the latest regional and global developments, including the situation in Gaza. In his remarks, President Recep Tayyip Erdogan thanked Prime Minister for his good wishes on Eidul Azha and reciprocated these sentiments for the people of Pakistan. He also reaffirmed Turkiye’s resolute support to Pakistan on all important issues.
Pakistan warns India of military response if new dams or canals disrupt Pakistan’s water supply LONDON
STAFF REPORT
Pakistan’s former Foreign Minister and the head of the Pakistani parliamentary delegation, Bilawal Bhutto Zardari, warned India on Monday that Pakistan would be forced to take aggressive actions if India proceeds with building new canals or dams on rivers flowing into Pakistan. His remarks, made during an interview with Sky News, condemned the weaponization of water by India and emphasized the severe consequences for the region if such steps were taken. Bilawal, also the chairman of Pakistan Peoples Party (PPP), declared that India’s threat to cut off water supplies to 240 million Pakistanis would be a violation of the United Nations Charter. He stressed that if India acted on this threat, Pakistan would consider it an act of war. “We can’t allow this precedent to be set; we can’t weaponize water,” he said, underscoring that any attempt by India to build new infrastructure on the three rivers shared between the two nations would trigger more aggressive steps from Pakistan. The former foreign minister highlighted that although Pakistan and India had been to war before,
the current situation presented a uniquely dangerous precedent. “At the moment, the threshold for conflict between India and Pakistan is the lowest it’s ever been in our history. We’ve achieved a ceasefire, but we have not achieved peace,” Bilawal noted. He reiterated that throughout the recent escalation, Pakistan had acted with restraint and responsibility, and emphasized that the country’s message remains one of peace, through dialogue and diplomacy. Bilawal underscored that Pakistan believes there is no military solution
to any of the disputes with India. “Unfortunately, India refuses to talk,” he said. “We are going from capital to capital, engaging with the international community, seeking their assistance in our pursuit for peace.” Bilawal also addressed the ongoing issue of the Indus Waters Treaty (IWT), which governs watersharing between the two countries. He explained that there is no legal basis for suspending or putting the treaty “in abeyance,” as it involves not only Pakistan and India, but also international institutions, requiring consensus for any changes.
Bilawal condemns Indian aggression, urges global action at Chatham House ISLAMABAD
STAFF REPORT
A Pakistani parliamentary delegation led by Bilawal Bhutto Zardari met with members of the British think tank community, academics, and policymakers at Chatham House in London on Monday, where they presented Pakistan’s stance on rising regional tensions with India. During the meeting, Bilawal denounced what he described as India’s unprovoked military aggres-
sion, calling it a violation of Pakistan’s sovereignty, international law, and the UN Charter. He warned that such actions threaten the stability of South Asia and cannot be ignored by the international community. The delegation emphasized that Pakistan’s armed forces, backed by strong public support, had given a robust response to Indian provocations. They added that the military had effectively resisted attempts by India to redefine the security environment in the region.
The Pakistan Tehreek-e-Insaf (PTI) on Monday strongly rejected the federal government’s Economic Survey 2024-25, accusing the coalition regime of “mishandling the economy, pushing millions into poverty, and fabricating gross domestic product (GDP) figures.” “At least 30 million people in Pakistan had slipped below the poverty line… these were the very people (incumbent rulers) brought to fix the economy, yet they extinguished household stoves instead,” said PTI spokesperson Sheikh Waqas Akram while addressing a press conference here on Monday. The criticism came soon after Finance Minister Muhammad Aurangzeb unveiled the economic survey, revealing that country’s GDP grew by 2.7% with inflation clocking in at 4.6% in the outgoing fiscal year. He noted that Pakistan’s economic recovery, which began after fiscal year 2023, gained momentum in FY 2024 and showed signs of consolidation in FY 2025, indicating a shift towards sustained
and monetary tightening, but structural inflationary triggers — such as energy tariffs, petroleum levies. supply-side shortages, and global commodity volatility — remain in place. [restrict level=1] Whether the current trend is sustainable without ongoing suppression of demand is uncertain. Senator Muhammad Aurangzeb while responding to a question did hint towards keeping consumption at a low level till a reform is carried out. He mentioned that, "We have had full support from our multilateral and bilateral partners in terms of sustainable growth and we are very clear that we do not want to squander the opportunity of reform
stability and GDP growth. The survey holds significance ahead of the annual federal budget — set to be tabled in the National Assembly tomorrow (Tuesday) — offering detailed insights into the country’s socio-economic performance in the outgoing fiscal year. It includes statistics related to GDP growth, tax revenue, the position of various industries, and other key fiscal and economic indicators. Speaking to journalists later, PTI’s Akram said that the incumbent rulers used to look down on 6.5% growth achieved during the Imran Khan-led government, but the average growth in three years stood at just 1.5%. “This so-called economic growth is just like Form-47 — fake and misleading,” he said while referring to the alleged rigging in February 8 General Elections. Akram criticised the government’s economic claims, questioning the credibility of the reported numbers. “We cannot comprehend the kind of growth they are trying to show… the people have become economically orphaned under this government.”
by increasing consumption just now". Trade Recovery Driven by Remittances and Administrative Compression The survey also highlights that Pakistan recorded a current account surplus of US$ 1.9 billion during July–April FY25, in sharp contrast to a US$ 1.3 billion deficit the year before. The surplus was driven primarily by a 31 percent year-on-year rise in worker remittances, which reached US$ 31.2 billion. One-off factors such as a Ramadan-linked spike in March (US$ 4.1 billion) contributed to this.
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