Karachi: The recently published “State of the Pakistan Economy Report 2025” praises government policies and shows progress in the economic growth journey, but a critical review shows that the report ignores many key factors.
Economic stability is largely due to temporary arrangements such as IMF support, remittances, and administrative price control measures.
The report also fails to highlight the stagnation in industrial growth, unsustainable debt levels, and structural trade imbalances, with the government’s emphasis on short-term gains.
The report attributes 1.15 percent growth in the agricultural sector to favorable policies, but this growth is lower than last year’s growth, which is significantly lower than last year’s agricultural growth of 8.09 percent.
The government has yet to come up with a long-term plan to address climate change, which is severely affecting the agricultural sector.
The report celebrates a significant reduction in inflation, mainly due to lower global commodity prices, a stable exchange rate, and policy measures, but core inflation remains high at 9.5 percent.
Administrative price controls are a temporary arrangement, the current account surplus is dependent on remittances rather than economic competitiveness, the rupee appreciated by 1.9 percent, and foreign exchange reserves rose to $16.4 billion, covering only two months of imports.
While this is an improvement, it is still far from the sustainable benchmark of six months of coverage, and the rupee’s stability is questionable given ongoing external debt obligations and reliance on IMF payments.
The FBR’s tax collection has increased by 25.9%, which is mainly due to indirect taxes, the consequences of which are being borne by the poor class. The government has been unable to expand the tax net, which is a question mark.
