The Ministry of Finance has released its latest monthly economic update and outlook report highlighting several positive trends in Pakistan’s economy.
The report said the inflation rate is expected to drop to single digits soon. It predicts an inflation rate of 12-13% in July and 11-12% in August. In particular, inflation was recorded at 11.8% in May and 12.6% in June 2024.
The ministry is optimistic about the country’s economic stability in 2024, helped by a $7 billion deal with the International Monetary Fund (IMF), which is expected to further stabilize the economy.
The report emphasizes the reduction of the current account deficit, the rate of inflation and the stabilization of the exchange rate. The current account deficit narrowed to $700 million from $3.3 billion. In addition, tax revenue grew significantly, rising 30% to Rs 9,311 billion.
The agriculture sector has shown a robust performance with over Rs 1,972 billion in loans disbursed from July 2023 to May 2024, a 26% increase in loans compared to the previous fiscal year. The industrial sector is also steadily recovering, with a remarkable 43.5% increase in tractor production to 45,529 units and a 47% increase in tractor sales.
Both exports and remittances increased, while the 11-month fiscal deficit remained at 4.9%. Exports in July are expected to be between $2.4 billion and $2.7 billion, and imports are estimated at $4.5 billion and $4.9 billion. Foreign direct investment (FDI) grew by 16.9% to reach US$1.9 billion last fiscal year. The report identifies China, Hong Kong and the United Kingdom as the largest investors in Pakistan.
The prime minister’s program provided loans of Rs 83.68 billion from February to March. In addition, electricity consumers using up to 200 units receive a subsidy for three months. As of June 2024, 43,356 Pakistanis have secured employment abroad, contributing to the country’s economic growth.
The finance ministry report paints an optimistic picture of Pakistan’s economic trajectory with improvement in various sectors and significant steps towards economic stability and growth.
