 "Pakistan's economy is struggling, but official reports try to paint a brighter picture. Representational Image/FP")
On the eve of its federal budget, the Shehbaz Sharif-led government on Monday (June 9) released Pakistan’s Economic Survey 2024-25. Presented by Finance Minister Muhammad Aurangzeb, the report attempts to portray an economy inching towards recovery. But behind the optimistic tone, there’s the plain old story of crisis, fragility and long-term neglect.
The highlight of the survey is a projected GDP growth rate of 2.7 per cent for 2025, up from 2.5 per cent in 2024. This marks a rebound from the contraction of 0.2 per cent in 2023. While marginally positive, such growth remains insufficient for a country of over 240 million battling high inflation, food insecurity and low job creation.
Aurangzeb claimed the economy is now on a “gradual path to recovery” and stressed the need for “sustainable growth”. But many of the headline numbers in the report are being seen as an attempt to gloss over entrenched structural problems, Moneycontrol reported.
Inflation relief on paper, pain on the ground
According to the survey, inflation has cooled to 4.6 per cent. If accurate, this would signal a sharp decline from the double-digit figures that have plagued Pakistan in recent years. However, on the ground, most Pakistanis continue to grapple with unaffordable groceries, fuel, and electricity bills. The inflation number, many say, is a statistical mirage.
Ever-increasing food prices, record energy costs, and unemployment have been the defining features of Pakistan’s economic reality.
The survey also points to a sharp cut in interest rates from 22 per cent to 11 per cent. While that may appear encouraging, it comes after months of crushing borrowing costs driven by runaway fiscal mismanagement. The rollback is less a victory and more an attempt at damage control.
Export growth modest, remittances still lifeline
On the external front, the finance minister noted a 7 percent rise in exports and \$3.1 billion in IT-related earnings, including $400 million generated by freelancers. But the real story continues to be remittances, which have jumped to $38 billion this year. That’s a $10 billion rise in two years, but not necessarily a cause for celebration.
The surge is driven more by desperation than policy success, with Pakistan’s diaspora sending larger amounts to support families back home. “Pakistan remains addicted to the money its diaspora sends,” said a commentator. “It’s essentially outsourcing economic survival to workers abroad.”
Impact Shorts
More ShortsFiscal tightrope and elite evasion
One of the more surprising claims in the survey is a current account surplus of $1.9 billion. But this is not the result of booming trade or investment. It has more to do with restricted imports, currency curbs, and deferred payments.
The survey notes a 26 per cent increase in revenue collection. However, this does little to change the ground reality, where indirect taxation continues to squeeze the poor, while military-run businesses, influential landlords and politically connected elites mostly escape the tax net.
With over 80 per cent of the powerful segments avoiding taxes, the system remains deeply skewed.
All eyes on IMF-aligned budget
With the full federal budget due on Tuesday (June 10), many believe it is being tailored to meet IMF expectations rather than address domestic distress. The fund’s conditions are reflected across the fiscal framework, from austerity measures to privatisation commitments.
Aurangzeb may have declared the economy on a recovery path, but for most Pakistanis, the daily struggle continues. Fuel and food remain out of reach for many, unemployment among the youth remains high, and the private sector is still hesitant to invest in an unstable economic environment.
The looming question is whether the budget will offer any relief. The answer, at least for now, seems to be no.