Pakistan reports moderate economic recovery in outgoing fiscal year

Pakistan witnessed moderate economic recovery in the outgoing fiscal year (from July 2023 to June 2024) with prudent policy management and administrative measures restoring market confidence, which led to a pick-up in economic activity, the Pakistani Finance Ministry said Friday.

The gross domestic product (GDP) growth accelerated to 2.4 percent was broad-based with the agriculture sector expanding by 6.3 percent while industry and services each grew by 1.2 percent, the ministry in its monthly economic outlook.

On the external front, a sustained improvement was observed in the current account balance, as it posted a deficit of 0.5 billion U.S. dollars for July-May in the year compared to a deficit of around 3.9 billion dollars last year, largely reflecting improvements in the trade balance and remittances, it added.

The central bank's monetary policy committee earlier this month reduced the policy rate by 150 basis points (bps) to 20.5 percent based on moderate GDP growth during the fiscal year receding inflationary pressures, the report said, adding that this downward revision has enhanced the positive business sentiments in the South Asian country.

"The government is committed to creating an investment-friendly environment to encourage long-term commitments from potential investors, which is imperative for maintaining economic stability," according to the report.