Pakistan is set to unveil its Federal Budget 2025-26 today in the National Assembly, with a projected outlay of Rs17.6 trillion. The figure is slightly lower than last year’s Rs18.78 trillion. Finance Minister Muhammad Aurangzeb will present the budget, followed by submission of the Finance Bill to the Senate. The keyword Federal Budget 2025-26 is expected to dominate national discussions in the coming days.
Economic Performance and Growth
According to the Economic Survey 2024-25, the real GDP grew by 2.68%. The industrial sector expanded by 4.77%, led by a manufacturing rebound. Services continued to dominate with 2.91% growth and a 58.4% GDP share. However, the 2.7% overall growth fell short of the 3.6% target.
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Fiscal and Monetary Trends
Revenue collection increased by 29%, reaching Rs10.8 trillion. The fiscal deficit narrowed to 6.5% of GDP from 7.4% last year. Inflation fell sharply, averaging 4.7% from July to April, compared to 26% the previous year. The State Bank cut interest rates to 17.5%, boosting money supply by 13.7%.
Agriculture Under Pressure
Agriculture grew just 0.56% due to sharp declines in major crops. Cotton production dropped by 30.7%, wheat by 8.9%, and maize by 15.4%. On the other hand, livestock rose 4.72%, and other crops like potato and onion showed double-digit growth.
External and Social Indicators
Per capita income rose to $1,824, backed by a $1.2 billion current account surplus. Remittances jumped 11% to $32 billion. Literacy improved to 62.8%, while education spending remained low at 2.1% of GDP. Health indicators showed minor gains, with infant mortality dropping to 52 per 1,000 births.
Technology, Labor, and Power
IT exports surged 32% to $3.5 billion. Digital banking saw an 89% jump in transaction volume. Yet, labor participation stayed at 37.2%, with stark gender gaps. Power capacity rose to 46,605 MW, but idle plant payments continue to burden consumers.
Capital Markets and Industry
Debt declined slightly to 74.1% of GDP. The KSE-100 index soared, gaining 78,000 points. Auto production rose 42%, while cement output fell. Mining showed modest gains but faced export declines.
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