Is Pakistan’s Economy About To Take Off? – OpEd
Is Pakistan’s economy back on track and moving towards stability? The answer to this question seems to be a ‘Big Yes’. The recent economic indicators support this argument that economy is about to take off; after the country had witnessed a sharp economic downfall in last few years due to a host of reasons.
The recent economic data suggest a significant economic growth and promising developments in various sectors during the current Fiscal Year. Recently, IMF also praised Pakistan’s effective policy implementation and reforms under the 2023–24 Stand-By Arrangement (SBA). The Managing Director of IMF – Kristalina Georgieva, during her meeting with Pakistani Prime Minister in New York, remarked about Pakistan’s economy that, “Growth is up, inflation is down, and the economy is on a sound path.”
The positive economic indicators reflect a robust upward trajectory, particularly in exports, manufacturing, and international trade collaborations. Pakistan’s exports have shown positive trajectory in FY 2024/ 25. One of the most notable achievements is Pakistan’s rice exports, which generated $4 billion in revenue, marking a significant leap from the $2.15 billion recorded in the previous year. The country has set a target of $5 billion in rice exports for the next financial year, aiming to bolster its economy through agricultural exports. Pakistan’s IT sector is also showing promising results as visible from the country’s IT exports to the UAE which surged by an impressive 34% to $265 million. This also highlights the country’s growing presence in the global IT market and is a testament to its potential in high-skill service exports. As per the monthly economic report – September 2024, by Pakistan’s Ministry of Finance; the overall exports are up by 2.9 % in first quarter of the current financial year.
Pakistan’s Large Scale Manufacturing (LSM) sector has also shown signs of recovery, with a 1.47% growth in third Quarter of FY24. Nearly 50% of sub-sectors posted positive growth, demonstrating the resilience of the country’s industrial base. This growth emphasizes the need for continued investment to further revitalize the manufacturing sector. In the industrial sector, collaboration with friendly countries is expanding with different MoUs, bilateral collaborations and trade agreements.
Agriculture remains a critical component of Pakistan’s economy, and recent initiatives signal further growth. Agriculture growth surged to 6.4% in FY24 – the highest in 19 years up from 4.4% in FY22 driven by innovative government initiatives like Green Pakistan Initiative. Recently a Chinese company has begun cultivating 1,000 acres of medicinal aloe vera in Punjab for export to China. This move not only boosts agricultural exports but also strengthens trade ties between Pakistan and China.
Pakistan’s external sector indicators are also showing a positive surge with increase in remittances, FDI and exports. Likewise, Inflation has dropped significantly from 38% in May 2023 to 6.9% by September 2024, a key achievement in stabilizing the economy. With these positive indicators, Pakistan’s GDP growth has rebounded to 2.5% in FY24 while IMF projects its further rise to 3.2% by FY25.
Ultimately, these positive developments reflect Pakistan’s efforts to strengthen its economy through targeted export growth, strategic international partnerships, and industrial modernization. With continued focus on key sectors like agriculture, IT, and manufacturing, the country is on a promising path to economic prosperity.
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