Pakistan’s GDP growth is projected to hit 3.2% in the ongoing fiscal year FY2024-25, said BMI, a Fitch Solutions company, in its research titled ‘Pakistan Country Risk Report’.
“We remain more optimistic than most analysts about Pakistan, and we hold an above-consensus view that GDP will expand by 3.2% in FY2024/25 (July 2024 to June 2025),” read the report published on July 15 after the staff-level agreement with the International Monetary Fund (IMF).
It added that while growth was a bit weaker than “we had expected at the start of the 2024 calendar year, recent figures have validated our core view that the economy would continue to recover following deadly floods in 2023”.
The report noted that preliminary figures from the government suggest that the economy expanded by 2.4% in FY2023/24, much faster than the 1.8% consensus forecast collected by Focus Economics.
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BMI highlighted three key reasons for its optimistic view about growth FY25 including growth in agriculture, lower inflation and policy easing.
“First, we expect that the vital agriculture sector will continue to recover,” read the report.
BMI noted that the proximate cause of Pakistan’s economic crisis in 2023/24 was devastating floods, which disrupted agricultural activity.
The report highlighted that the disaster caused significant economic pain in a country where 40% of the population works in agriculture.
“Grains production rebounded in 2024 and our agribusiness team expects that conditions will remain favourable in the 2025 harvest year.
On the other hand, cotton production in the country will slip from 6.7 million 480-pound bags in 2024 to 6.5 million bags in 2025, said the report.
“Even so, production will remain elevated by recent standards. This would be the second largest harvest since 2019,” read the report.
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