Pakistan’s Economy Shows Growth, But Job Migration Surges: Finance Ministry’s Final FY25 Report

The Ministry of Finance, in its final Monthly Economic Outlook for fiscal year 2024-25, painted a mixed picture of Pakistan’s economic health—highlighting signs of macroeconomic improvement alongside a significant uptick in overseas job migration.

Key Highlights

📈 Economic Growth & Inflation

  • Real GDP reportedly grew by 2.7% in FY2025.

  • Inflation in May dropped to 3.5%, driven by reduced food prices.

  • For June 2025, inflation is expected to remain between 3% to 4%.

  • However, the 2.7% growth figure has faced skepticism from independent economists, prompting the finance minister to propose a review committee—though no progress has followed.

🏭 Manufacturing & Investment

  • Large-Scale Manufacturing (LSM) grew 2.3% year-on-year in April but contracted 3.2% month-on-month.

  • Cumulative LSM shrank by 1.5% over the first 10 months.

  • The government needs over 8% LSM growth in May–June to support its annual GDP target.

  • Increased private-sector borrowing indicates renewed production and investor confidence.

🌍 Overseas Employment & Remittances

  • In May 2025, 59,995 Pakistanis registered for overseas jobs—a 12.7% increase from April.

  • Between January–May, 285,370 people emigrated for work, mainly from Punjab, with most headed to Saudi Arabia.

  • Remittances soared to $34.9 billion, up 28.8%, largely from Saudi Arabia and the UAE.

🌐 Trade & External Account

  • Current Account showed a $1.8 billion surplus (vs. last year’s $1.6B deficit).

  • Exports rose by 4% to $29.7B, while imports surged 11.5% to $54.1B, widening the trade deficit to $24.4B.

  • Despite this, the ministry claims the external position has improved, helped by remittances and export gains.

🏦 Interest Rates & Monetary Policy

  • The policy rate remains at 11%, despite low inflation—sparking criticism that it guarantees bank profits and suppresses real economic activity.

  • The Monetary Policy Committee (MPC) cited inflation risks and regional uncertainties as justification.

🌱 Agriculture & Reforms

  • For the Kharif 2025–26 season, targets include:

    • 2.2 million hectares of cotton cultivation

    • 10.2 million bales production goal

  • This comes after a 31% drop in cotton output last year.

  • Farm inputs (seeds, credit, fertilisers) have seen improvement due to government support.

Structural Reforms Ahead

The government reiterated its focus on:

  • Tax harmonisation

  • Energy pricing reforms

  • Privatisation efforts

  • Climate action

However, critics argue that no credible roadmap exists yet to convert short-term stabilization into sustained economic growth.