In the fiscal year 2023-24, Pakistan's economy demonstrated resilience amid global and domestic challenges, achieving a GDP growth of 2.38%. This recovery from the previous year's contraction of 0.21% was primarily driven by the agriculture sector's robust performance, which expanded by 6.25%—the highest in 19 years—thanks to significant outputs in wheat, cotton, and rice .
The industrial sector experienced modest growth of 1.21%, with manufacturing increasing by 2.42% and construction by 5.86%. However, large-scale manufacturing faced a slowdown, partially offset by gains in mining, quarrying, and small-scale manufacturing . The services sector, accounting for 57.7% of GDP, recorded a moderate growth of 1.21% reflecting subdued activity in wholesale, retail trade, and transport services .
Economic indicators showed positive trends: per capita income rose by $129 to $1,680, attributed to enhanced economic activity and currency appreciation . The investment-to-GDP ratio declined to 13.14% from 14.13% the previous year, influenced by contractionary macroeconomic policies and political uncertainty . National savings remained stable at 13% of GDP .
Fiscal management improved, with total revenue collection growing by 41% during July-March 2023-24, surpassing the 36.6% growth in total expenditure. Tax revenues increased by 29.3%, and non-tax revenues by 89.8%. Consequently, the fiscal deficit was contained at 3.7% of GDP, with a primary surplus of 1.5% .
Inflationary pressures eased, with average inflation recorded at 26% during July-April 2023-24, down from 28.2% in the same period last year. A continuous decline in inflation has been observed since January 2024 .
The external sector showed significant improvement: the current account deficit narrowed to $0.5 billion during July-March FY2024, compared to $4.1 billion in the same period last year. Exports increased by 9.3%, while imports declined by 8%, leading to a reduced trade deficit of 4.2% of GDP .
Foreign Direct Investment (FDI) inflows rose by 8.1% to $1.5 billion during July-April, compared to $1.3 billion in the same period last year . Additionally, the World Bank approved a 10-year, $20 billion lending package aimed at supporting economic stabilization and development initiatives in Pakistan .
In summary, Pakistan's economic performance in 2024 reflects a trajectory of recovery and stabilization, underpinned by strong agricultural output, improved fiscal discipline, and supportive external financing. Continued focus on structural reforms and investment in key sectors will be essential to sustain and enhance this positive momentum.
