ISLAMABAD: The year 2024 brought significant economic improvements for Pakistan, marked by record-breaking achievements and notable progress in key indicators:
Major Milestones
- Stock Exchange:
- Pakistan Stock Exchange (PSX) crossed the 100,000-point mark, the highest in the country’s history.
- Inflation:
- Inflation dropped to 4.9%, a six-and-a-half-year low, in stark contrast to the previous year’s record 38%.
- Policy Rate:
- The State Bank of Pakistan reduced the policy rate from 22% to 13%, boosting prospects for economic activity and lowering production costs.
External Sector Improvements
- Current Account:
- Achieved a $729 million surplus, the highest in 20 years and the second highest in history.
- Foreign Exchange Reserves:
- Reserves increased by approximately $4 billion.
- Trade Balance:
- Exports and remittances rose, while imports remained controlled, narrowing the trade deficit.
- Rupee Strengthening:
- The rupee gained Rs3 against the US dollar.
Budgetary Achievements
- Budget Surplus:
- Recorded a surplus of Rs1,700 billion in the first quarter, a first in 24 years.
- Government Revenue:
- Increased due to higher income and controlled expenditure.
IMF Program
- A new $7 billion loan under strict conditions was agreed upon with the IMF, including:
- Additional taxes worth Rs1,761 billion.
- Abolition of Rs450 billion in tax exemptions.
- Enhanced tax burden of Rs75 billion on salaried individuals.
Industrial Sector Challenges
Despite improved macroeconomic indicators, the industrial sector faced setbacks:
- Decline in Manufacturing:
- A 0.64% decrease in the production of major industries from July to October 2024.
- Unsuccessful Tax Schemes:
- The Tajir-Dost scheme aimed at bringing 3.1 million traders into the tax net failed to meet expectations.
International Support
- Saudi Arabia extended the $3 billion deposit for another year, reflecting continued bilateral support.
Outlook
The reduction in inflation and interest rates sets the stage for stronger economic activities in 2025. However, challenges like industrial production decline and stringent IMF conditions require focused policy interventions to sustain momentum.
Pakistan’s economic growth in 2024 demonstrates resilience and progress, with an optimistic outlook contingent on maintaining reforms and ensuring stability.
