The country’s external and internal economic sectors, including fiscal policy, remained stable in March with exports, Foreign Direct Investment (FDI) and remittances showing consistent growth.
According to monthly economic updates and outlook for the current Month of March 2025, issued by the Federal Ministry of Finance here on Tuesday, as the ongoing fiscal year progresses towards the last quarter, Pakistan’s economy demonstrates resilience and stability on fiscal and external fronts.
The external sector remains robust, with a current account surplus, export growth, strong remittance inflows, and rising foreign investment.
According to the report, the investors’ confidence continues to strengthen, as reflected in the bullish performance of the Pakistan Stock Exchange.
These positive developments lay the foundation for sustained growth and moderate inflation in the coming months of the fiscal year and inflationary pressures have eased, supported by declining food and energy prices, fostering overall price stability.
Fiscal consolidation measures are yielding tangible results, leading to a primary surplus and a narrowed fiscal deficit.
According to the report external sector’s stability remained intact and the external account position has strengthened, driven by continued increase in exports and a noteworthy rise in remittances
Despite an upward trend in imports, during July-February FY2025, the current account posted a surplus of $691 million compared to deficit of $1,730 million last year.
However, in February 2025, the current account recorded a deficit of $12 million, compared to a surplus of $71 million in February 2024.
During Jul-Feb FY2025, goods exports increased by 7.2 percent to $21.8 billion compared to $20.4 billion last year, while imports recorded an increase of 11.4 percent to reach $38.3 billion.
The service exports grew to $5.5 billion (up by 6.0%) and imports to $7.7 billion (up by 12.0%), resulting in a service trade deficit of $2.3 billion higher than $1.7 billion last year.
IT exports grew by 25.5 percent to $2.5 billion against $2.0 billion last year. Workers’ remittances recorded an impressive growth of 32.5%, with a robust inflow of $24.0 billion during Jul-Feb FY2025 compared to $18.1 billion last year-with the largest share from Saudi Arabia (24.6%) followed by UAE (20.3%). Net Foreign Direct Investment (FDI) was recorded at $1,618.4 million, 41.0 percent higher than the previous year.
According to the report, agriculture Sector improves on the back of government initiatives.
For the Rabi season 2024-25, wheat production is targeted to reach 27.9 million tonnes, supported by government initiatives such as input subsidies, the distribution of high-yielding seeds, and interest-free loans under the Kissan Card initiative. During Jul-Jan FY2025, agricultural credit disbursement grew by 16.0 percent, to reach Rs. 1,483.6 billion from Rs. 1,279.4 billion in the same period last year.
The Large-Scale Manufacturing (LSM) shows mixed trend amid ongoing challenges and LSM remains on a bumpy recovery path in January 2025, report said.
MoM growth edged up by 2.1 percent, signaling a mild improvement from December 2024.
However, on a year-on-year (YoY) basis, LSM contracted by 1.2 percent, compared to 1.1 percent growth last year. During Jul-Jan FY2025, LSM posted a decline of 1.8 percent, compared to a contraction of 0.6 percent last year.
According to the report, The Inflation decelerates as food and energy prices decline and CPI inflation recorded at 1.5 percent on YoY basis in February 2025 as compared to 2.4 percent in the previous month and 23.1 percent in February 2024. On a MoM basis, it decreased by 0.8 percent as compared to an increase of 0.2 percent in the previous month.
The fiscal consolidation efforts are strengthening the fiscal accounts and the fiscal consolidation measures have yielded positive results, showing improvements in fiscal accounts during the first seven months of FY2025, report said.
The fiscal deficit reduced to 1.7 percent of GDP in July-Jan FY2025 from 2.6 percent last year. Similarly, the primary surplus increased to Rs.3,518.7 billion (2.8% of GDP), against a surplus of Rs.1,938.8 billion (1.8% of GDP) last year.
According to the report, The net federal revenues grew significantly by 45.3 percent to Rs.6,362.5 billion during Jul-Jan FY2025 from Rs.4,379.5 billion last year.
This substantial growth is attributed to both tax and non-tax collection. Particularly, the receipts from non-tax collection grew sharply by 75.8 percent. During Jul-Feb FY2025, FBR tax collection increased by 25.9 percent to Rs.7,343.9 billion from Rs.5,831.3 billion last year. Within total collection, revenues from domestic taxes grew by 27.4 percent, while customs duty increased by 15.4 percent.
The report said that the government’s support for social protection and uplifting communities.
In February 2025, Bureau of Emigration and Overseas Employment registered 50,030 workers for employment, compared to 53,642 in February 2024.
The Pakistan Poverty Alleviation Fund, in collaboration with its 24 partner organizations, distributed 21,396 interest-free loans amounting to Rs. 1.0 billion.
Since the inception of the program in 2019, a total of 2.95 million interest-free loans amounting to Rs. 114.85 billion have been disbursed. The government has also allocated Rs. 20 billion for the Ramazan Package to benefit 4 million households.
According to the report under this package, Rs. 5,000 is being provided per household through a digital wallet. During JulJan FY2025, Rs. 241.0 billion has been spent under the Benazir Income Support Programme, against the budgetary allocation of Rs 592.5 billion for FY2025, showing an increase of 30.6 percent against last year.