Over the past week, Pakistan’s Economic Survey 2024–25 revealed a modest GDP growth of 2.7%, up from 2.5% the previous year, but falling short of the revised 3.6% target. The government and IMF project growth acceleration to 4.2% in FY 2026, contingent on enhanced investment and export-led initiatives.
In line with that goal, a key driver has been the sharp reduction in the policy rate—from 22% to 11%—aimed at easing monetary conditions and supporting domestic demand. However, analysts caution that credit policy alone may not suffice without structural reforms to boost competitiveness and exports.
Fiscal consolidation is also progressing: the tax-to-GDP ratio rose to 10.6% in FY 2025 (from 9.1%), edging closer to the IMF’s 13% target. The increase is attributed to new digital tax collection initiatives, enhanced point-of-sale tracking, and expanded taxpayer registrations.
Despite improvements, foreign debt services has reached critical levels, with Pakistan facing external repayments of over $23 billion (PKR 6.55 trillion) in 2025–26 and foreign borrowing hitting $26.7 billion—raising concerns over sustainability and default risks.
Against this backdrop, privatisation has gained momentum. The government has approved bids from four consortia for a majority stake in loss-ridden PIA, as part of the IMF-supported privatization drive. Similarly, in the U.S., Pakistan is seeking a joint-venture partner for the Roosevelt Hotel, targeting a valuation over $1 billion, with JLL managing the process.
Another economic pivot is underway in trade relations with the U.S.: recent meetings between Pakistan’s Finance Minister and U.S. trade officials were described as “productive”, focusing on lowering trade barriers and boosting Pakistani exports, with negotiations expected to conclude imminently.
Finally, Pakistan is preparing for a Central Bank Digital Currency (CBDC) pilot. The State Bank plans to test a digital rupee and finalize virtual asset legislation, while the government-backed Pakistan Crypto Council works on regulatory frameworks and engaging crypto leaders like Binance’s founde
