ISLAMABAD: The country’s economy demonstrated sustained positive developments during the first five months of the current fiscal year, with prudent fiscal management and strategic reforms paving the way for sustainable economic growth, the Ministry of Finance said on Friday. Finance.
“Macroeconomic fundamentals have strengthened, marked by a further deceleration in CPI inflation with stable food prices, effective fiscal consolidation leading to a fiscal surplus, a current account surplus supported by increased exports and remittances of funds, and an accommodative monetary policy,” said the Ministry of Finance. in its monthly economic report.
According to the report, these developments have strengthened business and consumer confidence, as evidenced by the significant reliance on private sector credit and the sharp rise in the Pakistan Stock Exchange.
The report added that efforts are underway to ensure that the agriculture sector achieves self-sufficiency by Rabi 2024-25, with the government having set a wheat production target of 27.920 million tonnes from an area of 9.262 million hectares.
To achieve this goal, concerted efforts were underway to ensure timely availability of essential agricultural inputs, including agricultural credit, quality seeds, fertilizers and mechanization support.
Meanwhile, agricultural credit disbursement reached Rs925.7 billion in FY2025 from July to November, an increase of 8.5 percent from Rs853.0 billion in FY2025. same period last year.
The report states that as of October 2024, the large-scale manufacturing (LSM) industry recorded a marginal year-on-year growth of 0.02%, signaling a positive change from the significant contraction of 5 .79% observed in October 2023. a gradual resumption of economic activity in a context of persistent challenges.
The auto industry performed well between July and November 2025, with production and sales of all vehicles increasing by 25.2% and 24.8%, respectively.
Inflation and income
Meanwhile, consumer price index (CPI) inflation recorded 4.9% on an annual basis in November 2024, compared to 7.2% in the previous month and 29.2% in November 2023 .
Taking stock of revenue, the report said that during the July-November financial year 2025, FBR’s tax collection increased by 23.3 per cent to Rs 4,295 billion from Rs 3,485 billion l ‘last year. In total, direct taxes increased by 27%, sales taxes by 23.6%, the FED by 25.1% and customs duties by 8.0%.
According to July-October Federal Tax Operations for FY 2025, net federal revenue increased by 71.8% to Rs 4,822 billion. This growth was mainly driven by a sharp increase in non-tax collections, which increased by 101.2% to Rs 3,192 billion. Similarly, tax collection increased to Rs 3.443 billion from Rs 2.748 billion last year.
Prudent expenditure management helped contain expenditure growth to 20.6% compared to strong revenue growth. In absolute value, total expenditure reached Rs.4472 billion compared to Rs.3707 billion last year.
As a result, the fiscal balance showed a surplus of Rs.495 billion (0.4% of GDP) compared to a deficit of Rs.862 billion (-0.8% of GDP) last year. Similarly, the primary surplus increased to Rs 3.124 billion (3.0% of GDP) against a surplus of Rs 1.430 billion (1.4% of GDP) last year.
The external account position has improved considerably, thanks to a notable increase in exports and remittances despite an increase in imports.
Current account and exports
In the July-November 2025 financial year, the current account recorded a surplus of $944 million, compared to a deficit of $1,676 million last year. In November 2024 alone, the current account recorded a surplus of $729 million, compared to a deficit of $148 million in November 2023. This is the fourth consecutive monthly surplus, following a surplus of $346 million in October 2024.
During the July-November financial year 2025, exports of goods increased by 7.4%, reaching $13.3 billion compared to last year, while imports recorded $23.0 billion , compared to $21.2 billion last year (8.3% increase). This resulted in a goods trade deficit of $9.7 billion, a slight increase from last year’s $8.8 billion, while maintaining stable overall trade momentum.
Meanwhile, in November 2024, the Bureau of Emigration and Overseas Employment registered 60,492 workers, compared to 77,316 in October 2024 and 81,427 in November 2023. The Poverty Alleviation Fund of Pakistan (PPAF), in collaboration with its 24 partner organizations, distributed 21,195 interest-free loans amounting to Rs 994 million.
Regarding the future outlook, the report said, to achieve the fiscal year 2025 target and support economic recovery, the government is aware of the need to achieve agricultural production targets by helping farmers reach the level desired production.
However, weather conditions can pose challenges as below-normal rainfall can lead to water stress during the critical emergence phase of Rabi crops like wheat and barley, especially in rain-fed agricultural areas.
Industrial facade
On the industrial front, despite the difficulties of certain sectors which remain in negative territory, the resilience of the economy is underlined by the solid performance of the heavily weighted sectors, which continue to boost the LSM in October.
Furthermore, the further easing of monetary policy in December should stimulate economic activity.
The growing demand for credit, particularly from the private sector, is a positive signal of growing confidence in the economy. This dynamic is poised to accelerate, supporting higher production levels and improved economic output in the months to come.
External facade
Externally, the hard-won stability is expected to continue through remittances and exports accompanied by decent imports.
Added to this will be exchange rate stability and controlled inflation – which is expected to remain in the range of 4.0 to 5.0% for December 2024.
Furthermore, improved fiscal performance between July and October, driven by higher revenues and prudent expenditure management, is expected to create fiscal space for development spending and support sustainable economic growth going forward.