ISLAMABAD, Nov 7, 2025: The World Bank's Pakistan Development Update for October 2025 says the economy grew by 3.0% in the fiscal year ending June 2025, up from 2.6% the previous year, driven by industrial and service sectors expansion.
However, the agricultural sector was affected by adverse
weather and pest issues alongside devastating floods, which will dampen growth
prospects in the short term.
The report projects a 3.0% GDP growth for FY 2026, slightly
above earlier estimates of 2.6%, due to revised data showing smaller flood
impacts on agriculture. Inflation was contained through fiscal tightening and
monetary policies, helping stabilize the economy despite global and domestic
hurdles.
Poverty declined modestly to 22.2% in FY 2025 from 25.3% the
year before, aided by growth in construction and logistics sectors and lower
food inflation. Still, vulnerabilities remain, particularly in rural areas with
low agricultural growth and high job informality in key sectors.
The World Bank emphasizes the necessity of sustained reforms
to boost inclusive growth, job creation, and social safety nets. It also
highlights Pakistan’s new five-year tariff reform plan aiming to boost exports
and economic resilience.
Pakistan Development Update Highlights:
- Economy
grew 3.0% in FY 2025, an improvement over 2.6% the previous year.
- GDP
growth projected at 3.0% for FY 2026 despite flood impacts.
- Inflation
moderated due to fiscal and monetary measures.
- Poverty
rate modestly reduced to 22.2%.
- Agriculture
underperformed due to floods and pests.
- Industrial
and service sectors showed stronger growth.
- Floods
caused human and economic losses, affecting recovery.
- New
tariff reform plan aims to reduce tariffs by half over 5 years.
- Continued
reforms critical for stability, job creation, and social protection.
This update underscores the delicate balance Pakistan faces
in maintaining growth momentum while addressing vulnerabilities from natural
disasters and global uncertainties.
The government's focus on structural reforms and economic
stabilization is crucial for fostering sustainable development and resilience.
Comments
Post a Comment