Pakistan Economic Outlook
The economy will have expanded by 0.3% in FY 2023 (July 2022–June 2023), according to a preliminary estimate by the statistical office released on 25 May. Private spending growth will have slowed to 1.7%, while public spending, fixed investment, exports and imports will have all slumped. The economy has been heavily affected by floods, government austerity and a balance-of-payments crisis. In politics, the government published its FY 2024 budget on 9 June. It pencils in a slightly smaller fiscal deficit compared to FY 2023 of 6.5%, with a record public sector development program to be funded by raising tax revenue by 28%. A new tax amnesty was also introduced, which was criticized by the IMF for breaking with the requirements of its current USD 6.7 billion lending program, which expires at end-June. This makes a new agreement with the Fund less likely, increasing the risk of default.
Inflation rose to a fresh record high of 38.0% in May (April: 36.4%). Inflation should cool from current levels later this calendar year on weak domestic demand, but the recent removal of currency controls and fuel subsidies will keep it far above its 10-year average of 8.0%. Key risks include extreme weather events, currency weakness and volatile commodity prices.
Line chart with 10 data points.View as data table, Chart
The chart has 1 X axis displaying Years. Data ranges from 2014 to 2023.
The chart has 1 Y axis displaying Economic Growth (GDP, ann. var. %). Data ranges from -1.3 to 6.5.YearsEconomic Growth (GDP, ann. var. %)Pakistan Economic Growth (GDP, ann. var. %)2014201520162017201820192020202120222023-202468Z
This chart displays Economic Growth (GDP, annual variation in %) for Pakistan from 2014 to 2023.