Economic Brief 2025 (Macro Outlook)

Economic context
KPMG’s Economic Brief 2025 reviews Pakistan’s FY25 macro performance based on the official Pakistan Economic Survey 2024–25. The economy recorded modest recovery with GDP growth around 2.7%, improvements in the current account, and easing of inflationary pressures relative to prior years though challenges remain, including public debt, currency volatility, and the need for structural reforms.

Key macro indicators

• Growth: Real GDP growth accelerated slightly to ~2.7% driven by industrial output, while agriculture underperformed.

• Inflation: Inflation moderated but remained a concern for affordability and real income.

• Fiscal deficit & debt: Fiscal consolidation efforts (spending restraint, revenue measures) continue; public debt remains high and constrains fiscal space.

• Trade & current account: Improvement in the current account balance was aided by imports compression and some export gains, and external financing (IMF program and other facilities) helped stabilise reserves.

Policy stance & challenges
KPMG emphasises that macro stability requires continued fiscal discipline, revenue mobilization (e.g., Finance Act measures), and structural reforms to improve competitiveness. The banking and energy sectors notably circular debt in power — remain policy priorities with large fiscal implications. KPMG notes recent multi-bank financing to ease power sector debt as a tactical measure supported by government and market players.

Business & investor implications
For businesses, the macro environment suggests cautious optimism: stabilising inflation and a current account improvement helps planning, but high public debt and possible policy shifts (e.g., tax changes) create uncertainty. KPMG recommends firms adopt flexible investment plans, robust scenario forecasting, and stronger balance-sheet management.

References:
KPMG Pakistan. Economic Brief 2025. Government of Pakistan, Pakistan Economic Survey 2024–25.

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