ISLAMABAD: Pakistan economy is observing a sustained recovery in the ongoing fiscal year. The first four months have shown better than expected improvement marked by receding inflation, a significant increase in remittances and IT exports, sustained external and fiscal sectors, and a downward trend in interest rate. The recovery across all sectors will support the achievement of the targeted economic outlook in coming quarters.
This has been claimed by the Finance Ministry, in its Economic Update and Outlook for the month of November 2024. It says that the meeting of the Federal Committee on Agriculture (FCA) held on October 29, 2024 to fix crop’s production targets for Rabi 2024-25. Wheat sowing is in full swing. Federal government has urged provinces to make utmost efforts to ensure input supplies and facilitate the farmers to enhance wheat sowing. The input situation is encouraging. During Jul-Oct FY2025, imports of agricultural machinery increased by 70.9 percent to $39.6 million.
During Rabi 2024-25 (October 2024), DAP offtake was 309 thousand tonnes, significantly increased by 92.2 percent, while Urea offtake was 358 thousand tonnes which decreased by 21.9 percent compared to the same period last year. The surge in DAP offtake is attributed to the disbursement of interest-free loans to small farmers by the Punjab Government through Kissan Card for the purchase of Agriculture inputs such as seed and fertilizer.
Large Scale Manufacturing (LSM) sector’s growth has slightly declined by 0.8 percent during Jul-Sep FY2025 against the contraction of 1.0 percent same period last year. On MoM basis, LSM sector registered a modest growth of 0.5 percent in September 2024, indicating a slight recovery although on YoY basis, it contracted by 1.9 percent. During Jul-Oct FY2025, performance of the auto industry remained encouraging as production and sales of all vehicles witnessed growth of 21.2 percent and 21.8 percent, respectively. At the subsector level, production of Cars increased by 51.0 percent, Trucks & Buses by 80.2 percent, Jeeps and pick-ups by 55.1 percent while Tractor production showed a decline of 54.2 percent. During the same period, total cement dispatches were 14.6 million tonnes, a 7.9 percent decrease from the last year. Domestic dispatches stood at 11.4 million tonnes, down by 15.0 percent while exports increased by 30.7 percent to 3.2 million tonnes.
In October 2024, cement dispatches increased by 8.7 percent, with total dispatches reaching 4.4 million tonnes compared to 4.0 million tonnes last year. Local cement dispatches stood at 3.3 million tonnes showing a slight decline of 0.5 percent, while export dispatches rose considerably by 51.3 percent, with volumes increasing to 1,080,691 tonnes.
During Jul-Oct FY2025, CPI Inflation stood at 8.7 percent against 28.5 percent recorded the same period last year. YoY Inflation was recorded at 7.2 percent in October 2024, compared to 6.9 percent in the previous month and significantly lower than 26.8 percent recorded in October 2023. The significant contributors to inflation include perishable food items (15.9 %), Housing, Water, Electricity, Gas & Fuels (19.2 %), Clothing and Footwear (14.6 %), Health (12.3 %), Restaurants & Hotels (7.9 %), Alcoholic Beverage & Tobacco (6.4 %) and Furnishing & Household equipment maintenance (5.9 %), while Transport observed a decline of 6.1 percent and non-perishable food items decreased by 1.5 percent. SPI for the week ended on 14th November 2024, recorded an increase of 0.55 percent as compared to the previous week. This week, prices of 06 items declined, 21 items remained stable, and 24 items increased.
During Jul-Sep FY2025, the net federal revenues grew by 186 percent to Rs 4,019 billion from Rs 1,406 billion same period last year. The unprecedented increase in revenues was mainly driven by the surplus profit of the State Bank of Pakistan (Rs 2,500 billion). The tax and non-tax revenues increased by 25.5 percent and 566.9 percent to Rs 2,563 billion and Rs 3,022 billion, respectively. In contrast, total expenditure grew slightly by 1.8 percent to Rs 2,483 billion (Rs 2,438 billion last year). The mark-up expenditure declined by 5.3 percent owing to the gradual decline in the policy rate. Resultantly, the fiscal balance posted a surplus of Rs 1,896 billion (1.5% of GDP) compared to the deficit of Rs 981 billion (0.9% of GDP), while the primary balance (surplus) reached Rs 3,202 billion (2.6% of GDP) as compared to Rs 400 billion (0.4% of GDP) same period last year. During Jul-Oct FY2025, the FBR net tax collection grew by 25.3 percent to Rs 3,442.6 billion as compared to Rs 2,748.4 billion last year. In October 2024, FBR collected 24.5 percent more taxes to reach Rs 879.7 billion against Rs 706.8 billion in October 2023.
The external account position improved on account of a notable increase in exports and remittances notwithstanding an increase in imports. During Jul-Oct FY2025, the current account recorded a surplus of $218 million compared to a deficit of $1,528 million last year. The current account recorded a surplus of $349 million in October 2024, compared to a deficit of $287 million in October 2023. This marks the third consecutive monthly surplus, following the $86 million surplus in September 2024 and $29 million in August 2024. During Jul-Oct FY2025, goods exports increased by 8.7 percent, reaching $10.5 billion compared to $9.7 billion last year, while imports recorded at $18.8 billion, compared to $16.7 billion last year (13.0% increase). This has led to a goods trade deficit of $8.3 billion, up from $7.0 billion last year. According to the Pakistan Bureau of Statistics, the export commodities that registered remarkable growth include Rice (52.5%), Fruits & vegetables (18.3%), Sugar (414%), Knitwear (18.7%), Bedwear (13.2%), Readymade Garments (25.4%), Chemicals & Pharma products (3.3%) and Cement (12.4%). The major imports which recorded a rise include Palm oil (6.1%), Petroleum crude (16.8%), Liquified Natural Gas (11.0%), Raw cotton (68.9%) Fertilizer (121.4%), Machinery (15.2%), and Iron & steel (6.1%). The service exports grew to $2.6 billion (8.0%) and imports to $ 3.6 billion (2.4%), resulting in a service trade deficit of $1.0 billion lower than $1.1 billion last year. IT exports grew by 34.9 percent to $1.2 billion against $ 0.9 billion last years.
Workers’ remittances recorded inflows of $11.9 billion, marking a significant increase of 34.7 percent over $8.8 billion last year with the largest share from Saudi Arabia. Foreign Direct Investment (FDI) recorded at $904 million, 32.3 percent up from the previous year. The main contributors to this growth were China $414 million (45.8%), Hong Kong $100 million (11.0%), and the UK $94 million (10.4%). The power sector received a net FDI of $414 million, accounting for 46 percent share, followed by Oil & Gas exploration with $104 million (11.5% share). Moreover, private sector Foreign Portfolio Investment (FPI) had a net outflow of $ 97.2 million, while Public FPI recorded a net inflow of $283 million. Pakistan’s total liquid foreign exchange reserves were recorded at $16.0 billion on November 08, 2024, with the State Bank of Pakistan’s reserves at $11.3 billion.
This has been claimed by the Finance Ministry, in its Economic Update and Outlook for the month of November 2024.
It says that the meeting of the Federal Committee on Agriculture (FCA) held on October 29, 2024 to fix crop’s production targets for Rabi 2024-25. Wheat sowing is in full swing. Federal government has urged provinces to make utmost efforts to ensure input supplies and facilitate the farmers to enhance wheat sowing. The input situation is encouraging. During Jul-Oct FY2025, imports of agricultural machinery increased by 70.9 percent to $39.6 million. During Rabi 2024-25 (October 2024), DAP offtake was 309 thousand tonnes, significantly increased by 92.2 percent, while Urea offtake was 358 thousand tonnes which decreased by 21.9 percent compared to the same period last year. The surge in DAP offtake is attributed to the disbursement of interest-free loans to small farmers by the Punjab Government through Kissan Card for the purchase of Agriculture inputs such as seed and fertilizer.
Large Scale Manufacturing (LSM) sector’s growth has slightly declined by 0.8 percent during Jul-Sep FY2025 against the contraction of 1.0 percent same period last year. On MoM basis, LSM sector registered a modest growth of 0.5 percent in September 2024, indicating a slight recovery although on YoY basis, it contracted by 1.9 percent. During Jul-Oct FY2025, performance of the auto industry remained encouraging as production and sales of all vehicles witnessed growth of 21.2 percent and 21.8 percent, respectively. At the subsector level, production of Cars increased by 51.0 percent, Trucks & Buses by 80.2 percent, Jeeps and pick-ups by 55.1 percent while Tractor production showed a decline of 54.2 percent. During the same period, total cement dispatches were 14.6 million tonnes, a 7.9 percent decrease from the last year. Domestic dispatches stood at 11.4 million tonnes, down by 15.0 percent while exports increased by 30.7 percent to 3.2 million tonnes. In October 2024, cement dispatches increased by 8.7 percent, with total dispatches reaching 4.4 million tonnes compared to 4.0 million tonnes last year. Local cement dispatches stood at 3.3 million tonnes showing a slight decline of 0.5 percent, while export dispatches rose considerably by 51.3 percent, with volumes increasing to 1,080,691 tonnes.
During Jul-Oct FY2025, CPI Inflation stood at 8.7 percent against 28.5 percent recorded the same period last year. YoY Inflation was recorded at 7.2 percent in October 2024, compared to 6.9 percent in the previous month and significantly lower than 26.8 percent recorded in October 2023. The significant contributors to inflation include perishable food items (15.9 %), Housing, Water, Electricity, Gas & Fuels (19.2 %), Clothing and Footwear (14.6 %), Health (12.3 %), Restaurants & Hotels (7.9 %), Alcoholic Beverage & Tobacco (6.4 %) and Furnishing & Household equipment maintenance (5.9 %), while Transport observed a decline of 6.1 percent and non-perishable food items decreased by 1.5 percent. SPI for the week ended on 14th November 2024, recorded an increase of 0.55 percent as compared to the previous week. This week, prices of 06 items declined, 21 items remained stable, and 24 items increased.
During Jul-Sep FY2025, the net federal revenues grew by 186 percent to Rs 4,019 billion from Rs 1,406 billion same period last year. The unprecedented increase in revenues was mainly driven by the surplus profit of the State Bank of Pakistan (Rs 2,500 billion). The tax and non-tax revenues increased by 25.5 percent and 566.9 percent to Rs 2,563 billion and Rs 3,022 billion, respectively. In contrast, total expenditure grew slightly by 1.8 percent to Rs 2,483 billion (Rs 2,438 billion last year). The mark-up expenditure declined by 5.3 percent owing to the gradual decline in the policy rate. Resultantly, the fiscal balance posted a surplus of Rs 1,896 billion (1.5% of GDP) compared to the deficit of Rs 981 billion (0.9% of GDP), while the primary balance (surplus) reached Rs 3,202 billion (2.6% of GDP) as compared to Rs 400 billion (0.4% of GDP) same period last year. During Jul-Oct FY2025, the FBR net tax collection grew by 25.3 percent to Rs 3,442.6 billion as compared to Rs 2,748.4 billion last year. In October 2024, FBR collected 24.5 percent more taxes to reach Rs 879.7 billion against Rs 706.8 billion in October 2023.
The external account position improved on account of a notable increase in exports and remittances notwithstanding an increase in imports. During Jul-Oct FY2025, the current account recorded a surplus of $218 million compared to a deficit of $1,528 million last year. The current account recorded a surplus of $349 million in October 2024, compared to a deficit of $287 million in October 2023. This marks the third consecutive monthly surplus, following the $86 million surplus in September 2024 and $29 million in August 2024. During Jul-Oct FY2025, goods exports increased by 8.7 percent, reaching $10.5 billion compared to $9.7 billion last year, while imports recorded at $18.8 billion, compared to $16.7 billion last year (13.0% increase). This has led to a goods trade deficit of $8.3 billion, up from $7.0 billion last year. According to the Pakistan Bureau of Statistics, the export commodities that registered remarkable growth include Rice (52.5%), Fruits & vegetables (18.3%), Sugar (414%), Knitwear (18.7%), Bedwear (13.2%), Readymade Garments (25.4%), Chemicals & Pharma products (3.3%) and Cement (12.4%). The major imports which recorded a rise include Palm oil (6.1%), Petroleum crude (16.8%), Liquified Natural Gas (11.0%), Raw cotton (68.9%) Fertilizer (121.4%), Machinery (15.2%), and Iron & steel (6.1%). The service exports grew to $2.6 billion (8.0%) and imports to $ 3.6 billion (2.4%), resulting in a service trade deficit of $1.0 billion lower than $1.1 billion last year. IT exports grew by 34.9 percent to $1.2 billion against $ 0.9 billion last years.
Workers’ remittances recorded inflows of $11.9 billion, marking a significant increase of 34.7 percent over $8.8 billion last year with the largest share from Saudi Arabia. Foreign Direct Investment (FDI) recorded at $904 million, 32.3 percent up from the previous year. The main contributors to this growth were China $414 million (45.8%), Hong Kong $100 million (11.0%), and the UK $94 million (10.4%). The power sector received a net FDI of $414 million, accounting for 46 percent share, followed by Oil & Gas exploration with $104 million (11.5% share). Moreover, private sector Foreign Portfolio Investment (FPI) had a net outflow of $ 97.2 million, while Public FPI recorded a net inflow of $283 million. Pakistan’s total liquid foreign exchange reserves were recorded at $16.0 billion on November 08, 2024, with the State Bank of Pakistan’s reserves at $11.3 billion.
Ends
