Pakistan sets target of 3.6% annual growth

KARACHI, Pakistan

Pakistan on Tuesday released its annual economic survey, aiming for a 3.6% growth rate in the coming fiscal year, up from the current 2.4%.

The Economic Survey of Pakistan, an annual report that charts the country’s economic progress for the outgoing financial year – from July to June – was released by Finance Minister Aurungzeb Khan at a news conference in the capital Islamabad a day before Prime Minister Shehbaz Sharif government is going to propose its first budget of Rs 18 trillion (about $64.8 billion), since its inauguration in March.

“Pakistan was on the verge of default last year, but due to economic stability achieved in recent months, the country is in a different position, and setting new targets,” Khan said.

The growth rate for the current fiscal remained at 2.4%, falling short of the set target of 3.5%. The IMF, Asian Development Bank, and World Bank, however, projected the growth rate to increase by 2%, 1.9% and 1.8%, respectively, for the outgoing fiscal year, the report said.

Other missed targets include industry, services, and large-scale manufacturing, whereas, the agriculture sector witnessed the highest growth rate in the last 19 years, at 6.3%.

The country faced a trade deficit of $21.73 billion, while the current account deficit, with a whopping drop, was recorded at $202 million compared to 3,920 million dollars last year.

New targets

According to the report, the size of Pakistan’s economy in 2023-24 increased by 11% i.e. from $338 billion to $375 billion amid a 10.6% rise in exports.

The per capita income increased to $1,680 with an addition of $129 due to “improved economic activity and appreciation” of the rupee.

According to Khan, Islamabad has had “very constructive” talks with the IMF vis-a-vis the new loan program as Islamabad is committed to perusing its “reforms agenda.”

“From my perspective, it’s very much Pakistan’s program funded by the fund (IMF),” he remarked.

Islamabad, which received $1.1 billion, the last tranche of a $3 billion IMF bailout package in May, is negotiating for a "long and larger" loan program to the tune of $7 to $8 billion.