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NIAS Area Studies
PAKISTAN READER
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In Focus
Pakistan Economic Survey 2024-25: Government fails to achieve growth in key areas, highlights Dawn
On 9 June, finance minister Muhammad Aurangzeb released Pakistan Economic Survey 2024-25 in Islamabad. According to him, Pakistan should register a growth rate of 2.7 per cent in the financial year 2024-25. This still stays short of the desired 3.56 per cent growth. In the previous financial year, this number stood at 2.5 per cent. The current projected number for the annual GDP growth is around two per cent less than the “long-term average.” The National Accounts Committee revealed that the GDP of the country surged by 1.37 per cent during July 2024 to September 2024. From October 2024 to December 2024, the GDP grew at 1.53 per cent. From January 2025 to March 2025, this number stood at 2.4 per cent. The April 2025 to June 2025 has to stand at 5.5 per cent if the finance minister’s prediction for annual GDP growth is to be matched. The finance minister claimed that the following year would be “a turnaround story.” He also pointed out that the economic performance must not be critiqued without taking account of “global economic growth.” The finance minister also hinted of India’s alleged mal intentions to disrupt Pakistan’s economic growth. He alleged that the executive director of the International Monetary Fund, who happens to be of Indian origin, tried to cause obstacles in Pakistan receiving the second tranche of Extended Fund Facility.
The finance minister pointed out how a 13.5 per cent decrease in production of “major crops” had negatively impacted the GDP. Agriculture sector, which was expected to grow by two per cent, registered a mere “growth” of just 0.6 per cent. The slowdown in the agricultural sector is linked to the earlier predicted scarcity of water of roughly 35 per cent. However, this number later stood at around 12 per cent. The industrial growth stood at 4.8 per cent. However, it is anticipated that this would be amended to a lower number later.
On 10 June, an editorial in Dawn titled “Behind the numbers” criticized the Finance Minister on not elaborating as to why the government remained unsuccessful in achieving its desired targets in areas such as “agriculture and big industry.” The editorial also criticized the government for not imposing taxes on sectors such as “retail, real estate, big farmers,” etc. It highlighted how the projected GDP annual growth stands at 2.68 per cent, a number which is much lower than the combined average of GDP in the previous five years (3.4 per cent). The editorial also highlighted the areas such as – per capita income and investment to GDP ratio which have seen an improvement in comparison to the last year.
On the same day, an editorial in The News International titled “Economic survey,” applauded the federal government for saving the economy from running up a “default.” It also points out how the IMF had praised the federal government for bettering the “economic and fiscal indicators.” As per the editorial, the improvements in lowering the fiscal deficit would have been impossible, had the government not surged taxes on the people drawing salaries. Further, the government also increased the “utility tariffs” that helped addressing the fiscal problem. The editorial also voices concerns regarding the agriculture sector not being able to register a respectable growth. The agriculture sector grew by 0.56 per cent in the financial year 2024-25. This number stood at 6.4 per cent for the previous financial year.
(“’Fantastic story on inflation’: Economic Survey shows ambitious GDP growth for FY25,” Dawn, 9 June 2025; Khaleq Kiani, “Economic Survey 2024-25: Growth stumbles as key targets missed,” Dawn, 10 June 2025; “Economic survey,” The News International, 10 June 2025)
Pakistan Economic Survey 2025:
Public Debt: PKR 76.01 trillion (USD 269 billion)
On 10 June, The News International reported on Pakistan’s public debt based on the Pakistan Economic Survey 2024-25. The country’s public debt increased to PKR 76.01 trillion (USD 269 billion) as of March 2025, up by 337 per cent over the past decade and a 994 per cent jump since 2008, highlighting the country’s persistent fiscal imbalance. At present, debt stands at 66.27 per cent of GDP, surpassing the statutory limits set forth by the Fiscal Responsibility and Debt Limitation Act (FRDLA). This means every Pakistan citizen, including newborns, now carry a debt burden of PKR 277,462. Successive governments have resorted to borrowings to offset deficits.
During 2013-18, the PML-N added PKR 10 trillion more to debt, in 2018-22 the PTI government added PKR 19.4 trillion, and since April 2022, over PKR 31.6 trillion more has been added by the government. In terms of domestic debt, the quantum stands at PKR 51.52 trillion and external debt at PKR 24.49 trillion (USD 87.4 billion). Interest payments alone consumed PKR 6.44 trillion in the first nine months of the Financial year 2025 i.e. a staggering 66 per cent of the total budget. Of this, PKR 5.78 trillion went to domestic debt and PKR 656 billion to external.
Pakistan has mostly relied on long-term instruments like Pakistan Investment Bonds (PIBs) and Sukuk (Islamic Bonds) when it comes to its domestic debt portfolio. Its external debt portfolio reflects a strategic approach of utilizing long-term, concessional loans. Of the USD 87.4 billion in external public debt, government debt comprises USD 79.1 billion and the IMF USD 8.3 billion. Long-term multilateral loans account for 52 per cent of the external debt, comprising concessional loans from institutions like the World Bank and Asian Development Bank. Pakistan’s permanent debt rose to PKR 40 trillion, making up 78 per cent of its debt. Whereas the floating debt fell to PKR 7.86 trillion from PKR 10.25 trillion in June 2024. The country’s unfunded debt rose modestly to PKR 2.94 trillion. (Israr Khan, Khalid Mustafa, “Alarm as public debt surges to Rs76tr,” The News International, 10 June 2025)
Digital Economy: IT Sector recorded highest trade deficit among service sectors; Freelancing emerges as major foreign exchange source
On 10 June, based on the Pakistan Economic Survey 2024-25, The News International reported that remittances from freelancers amounted to USD 400 million in the first nine months of the current Fiscal Year (FY). The freelancer remittance is expected to rise to USD 533 million- nearly PKR 150 billion by the end of the fiscal year. As freelancing is emerging as a significant source of foreign exchange, Pakistan has adopted measures that allow IT exporters retain all their foreign earnings and invest abroad without permission from the State Bank of Pakistan.
The economic survey highlighted that freelancers who received training under the Digiskills.pk 2.0 initiative have earned USD 1.65 billion until December 2024. The survey also highlighted the e-Rozgar centres "intended towards promoting freelancers and entrepreneurship with a target of 20,000 job creations." The survey stated that "there shall be 50 e-Rozgaar centres operational during FY 2025."
According to the report, the service sector recorded a trade deficit of USD 2.318 billion between July to March of FY25. The period saw a 23.7 per cent increase of USD 541 million in Information and Communication Technology (ICT) exports, totalling USD 2.825 billion. Additionally, the Information Technology (IT) and Information Technology Enabled Services (ITES) showed the highest trade surplus among all service sectors during this period, recording USD 2.429 billion in surplus in contrast to the USD 1.997 billion the previous year. "With digital exports rising and easier payment systems in place, freelancers are becoming a reliable part of Pakistan’s economic future," The News International stated.
("Freelancers send $400m, quietly powering Pakistan’s digital economy, The News International, 10 June 2025; "Pakistan Economic Survey 2024-25: Chapter 15: Information Technology and Telecommunication," Ministry of Finance, Government of Pakistan, 9 June 2025)
Climate Change: Fallouts of Unpredictable Weather Patterns
On 10 June, Dawn reported that the Economic Survey has warned the country about the increasing climate crisis, as it is an existential threat to Pakistan. Pakistan is facing unpredictable weather patterns, with rising temperatures and erratic rainfall increasing in frequency and intensity as the world crosses the crucial 1.5 degrees Celsius threshold. The survey has emphasised that there is an urgent need to reduce global emissions and create strategies locally in response to the vulnerability. The country has experienced 224 extreme natural disaster events between 1980 to 2024; according to the survey, 2024 witnessed severe climate phenomena in Pakistan, marked by extreme heat, unpredictable rainfall, and regional disparities among these disasters, floods have emerged as the most catastrophic in terms of economic damage and a serious threat to Pakistan’s human capital. These events have affected a huge population of over 100 million individuals, inflicted with total damages of $36.4 billion, excluding broader economic losses, and this leads to high impact, underscoring the issue of climate injustice, which prompts the government to make significant future capital investments in infrastructure.
These natural calamities have caused billions of dollars in damage, with massive displacement and necessitated high capital investments, and these challenges have intensified Pakistan’s climate profile, reflecting global trends of heightened variability and environmental distress, making the country’s resilience dependent on urgent and coordinated action at multiple levels. The survey has also stated that despite Pakistan contributing a very minimal amount of greenhouse gas emissions in the world, Pakistan remains among the most vulnerable nations to climate-related disasters.
Pakistan is aiming to transform this vulnerability into resilience through sustained investments in renewable energy, climate-smart infrastructure, and ecosystem restoration. By aligning global support with national-level efforts, Pakistan is aiming to mitigate the climate crisis but also work towards a safer and more sustainable future. (“Warnings of an existential climate threat,” Dawn,10 June 2025)
In Brief
ECONOMY
Remittances to hit a record high USD 36 billion
On 10 June, The News International reported that Pakistan remittance is expected to hit a record high of 36 billion USD at the end of the fiscal year of 2025, contributing to the country with 1.9 billion USD which will create a rare current account surplus in the July-April period. The current account is in contrast to the same period last year, as it has a deficit of 1.3 billion. It was only the second time in two decades, last it was in the 2003 fiscal year at 4.1 billion USD. There is a 31 per cent increase in the remittance, which is 31.2 billion USD in July-April 2025. As the overseas Pakistanis send more money home through better transfer channels and increased confidence in economic management stated by the report of the Pakistan Economic Survey 2024-25. The trade deficit rises modestly, but it tries to reduce the offset pressure by increasing textile imports and import control measures to narrow the external gap. The textile imports contribute to 53% of total exports. Finance Minister Muhammad Aurangzeb stated that the growth of remittance inflow is significant, and it is expected to be 36 billion USD . Due to reduced government loan disbursements and greater debt repayments, the financial account had a 1.6 billion USD outflow, as opposed to a 4.2 billion USD net inflow the previous year. Recently, the IMF has given 1.02 billion USD to Pakistan for maintaining the exchange rate and foreign reserves. This had led to boosted investor confidence and signaled a sustainable fiscal path, which reflected a 9.3pc surge in the KSE-100 index. It is amid expectations of renewed economic momentum through stronger capital inflows. (Pakistan to get record $36bn in remittances, fuelling current account surplus,” The News International, 10 June 2025)
EXTERNAL
China-Pakistan agreement on labour training to transfer cutting edge technology
On 10 June, The News International reported that a milestone five-year agreement has been signed between China and Pakistan aimed to transfer cutting-edge technology and facilitating the training of professionals with skills for the evolving global demands. The agreement between the Guangdong Shoe-making Machinery Association, affiliated with the Chinese government, and the Pakistan Industrial Sewing Machines Importers and Dealers Association (PISMIDA). It aims to strengthen Pakistan in industries related to leather processing, footwear, and the garment industry. Pakistan workers are to receive training in modern industrial demands, machinery, and expertise in techniques for production. This would position Pakistan to compete in the global market. The agreement focused on innovation in leather-based manufacturing. Yaseen, representative of Pakistan, expressed that it will offer benefits for Pakistani industries. It is seen as a shared growth for the countries. (“Pakistan, China ink technology transfer labour training agreement”, The News International, 10 June 2025)
CHINA & CPEC
Shares of China’s arms companies surge following Pakistan’s interest in arms purchases
On 10 June, The News International reported that the Chinese defence company’s shares rose following an announcement by Pakistan on 9 June to buy one of China’s advanced fighter jets. Bloomberg reported this to be a part of a major arms purchase. In their article published on 9 June, Bloomberg reported that China’s J-35 stealth fighter jet is to be the core of the package. AVIC Shenyang Aircraft Company, the makers of J-35, shares boosted by ten per cent. The gains are extending to the third consecutive session. On a social media post on 6 June, the Government of Pakistan posted that they would acquire 40 J-35 fifth-generation fighter jets, KJ-500 airborne early warning and control aircraft, and HQ-19 ballistic missile defence system. China’s Ministry of Defence did not respond to the request. Bloomberg reported that China’s arms makers shares have been increasing since Pakistan claimed that Chinese J-10Cs helped to shoot down India’s French-made Rafale and six other fighters. The article stated, India has undermined impact of weaponry deployed from other countries to Pakistan. The J-35 sales for Pakistan would be China’s first fifth-generation jet export. (“Shares of Chinese arms makers surge: Pakistan plans to buy J-35, KJ-500 aircraft, HQ-19 missiles, says report”, The News International, 10 June 2025; Josh Xiao and Sangmi Cha, “Chinese defense companies soar as Pakistan touts arms purchase”, Bloomberg, 9 June 2025)
ON INDIA
"Pakistan chose ceasefire despite strategic advantage," says Bilawal Bhutto
On 10 June,The Dawn and The News International reported that Pakistan’s delegation reached the U.K to present Pakistan’s perspective and to counter New Delhi’s narrative on the recent India-Pakistan conflict, the delegation engaged with UK parliament members, Media, Academia, Think tanks and policymaking community at London. Pakistan People's Party (PPP) chairman Bilawal Bhutto claims that Pakistan agreed to a ceasefire with India despite having the upper hand in conflict and seeks international intervention from countries like the U.K and US to resolve the issue and to initiate dialogue with India. The Pakistani delegation also highlighted its military prowess by taking down six Indian jets and stressed India’s violation of Pakistan’s sovereignty, international law and UN charter. Bilawal Bhutto asserted Pakistan's position as “rational and responsible state” and alarmed India's intervention in the Indus water treaty would be considered as an act of war. The Pakistani delegation is expected to proceed to Brussels in the upcoming days to present its perspective on recent conflict with India, says Dawn.( “Pakistan agreed to truce with India for sake of dialogue,” Dawn, 10 June 2025), (“ Pakistan asks world powers to stop India's water terrorism,”The News International, 10 June 2025)
“Pakistan has been appointed vice chair of the UNSC Counter-Terrorism Committee and chair of the UNSC panel that oversees the implementation of sanctions on the Afghan Taliban,” states an editorial in The Express Tribune
On 10 June, an editorial in The Express Tribune titled “Diplomatic success at UN” reported that The United Nations Security Council has selected Pakistan as Vice Chair of the Counter-Terrorism Committee and made it the head of the group monitoring sanctions on the Afghan Taliban. Because of Pakistan’s membership on the UNSC, it can play a significant part in settling global counter-terrorism and Afghanistan sanction matters, says The Express Tribune. The news article frames it as a diplomatic success for Pakistan and contrasts with India’s recent diplomatic outreach after the Pahalgam attack, which according to The Express Tribune did not yield desired outcomes. Pakistan’s presence at the UN now allows it to take part in making its region more secure by joining efforts with Afghanistan on tackling terrorism and trust issues. It is now important to see how the two countries will work together through diplomacy ahead. (“Diplomatic success at UN,”The Express Tribune, 10 June 2025)