Worker exodus grows by 12% in May

The finance ministry said on Monday that the economy continued its growth momentum in the just-ended fiscal year, while the number of people leaving Pakistan in search of jobs grew by 12% in May alone.

The Ministry of Finance's last monthly economic outlook report for the fiscal year 2024-25 depicted two contrasting realities. The fiscal year ended on Monday.

The finance ministry claimed that the economy was improving while more people were looking overseas for better job opportunities.

"In May 2025, the Bureau of Emigration & Overseas Employment registered 59,995 workers, a 12.7% increase from 53,231 in April," stated the monthly economic outlook report. Overall, about 285,370 people left Pakistan to find better opportunities overseas during the January-May period of 2025. More than half of these individuals belonged to Punjab, while the overwhelming majority secured jobs in Saudi Arabia, according to the Bureau of Emigration report.

Due to the rise in overseas migration and a shift of informal transfers to formal channels, remittances reached $34.9 billion, up 28.8%, during the first 11 months of this fiscal year. The increase in inflows was recorded from Saudi Arabia and the UAE at 20.4%.

The finance ministry stated that Pakistan's economy maintained its growth momentum in fiscal year 2025, supported by strengthened macroeconomic fundamentals, prudent fiscal management, and improved external sector performance.

Real GDP grew by 2.7%, while inflation eased steadily, according to the report.

However, the 2.7% growth figure has been disputed by independent economists. Finance Minister Muhammad Aurangzeb had offered to set up a committee of independent experts and academia to investigate the number, but no progress has been made since. The finance ministry said that inflation is expected to remain within the range of 3% to 4% for June 2025. The outlook for Large-Scale Manufacturing (LSM) in the coming months appears positive, supported by encouraging trends in high-frequency indicators such as cement dispatches and automobile sales, it added.

The ministry noted that increased loans to private-sector businesses suggest rising production activities and improved investor confidence. On the external front, higher remittances and exports are expected to keep the current account in surplus for fiscal year 2025. However, the ministry lacks a credible plan to turn stabilisation into sustainable growth momentum.

In May, inflation was recorded at 3.5%, driven by reduced food prices. Yet, the Monetary Policy Committee (MPC) this month decided to maintain the policy rate at 11%, citing potential inflation risks, external imbalances, and regional uncertainties.

Many have criticised the central bank's decision to keep interest rates in double digits, arguing that it primarily ensures guaranteed profits for commercial banks.

The finance ministry said that the MPC noted that while yearly inflation in May stood at 3.5%, it is expected to remain within the range of 5% to 7% in the new fiscal year, which started on Tuesday.

The external account position continued to improve during the July-May period of the just-ended fiscal year due to rising remittances and exports. The current account posted a $1.8 billion surplus, reversing last year's deficit of $1.6 billion.

Goods exports rose by only 4% to $29.7 billion, while imports increased by 11.5% to $54.1 billion, widening the trade deficit to $24.4 billion from $20.0 billion last year.

The ministry said that the government remains committed to structural reforms focused on tax harmonisation, energy pricing, and privatisation, while also advancing climate action through dedicated initiatives to lay the foundation for inclusive and sustainable growth. The government has again expressed hope for better cotton production this year, following a 31% decline last season.

For the Kharif season 2025–26, the federal government has set targets of 2.2 million hectares for cotton cultivation and 10.2 million bales for production, according to the finance ministry. Farm input utilisation continues to improve, supported by government efforts to ensure the availability of quality seeds, adequate credit, machinery, and fertilisers, it added. The ministry said that Large-Scale Manufacturing (LSM) showed a mixed performance in April 2025, registering yearly growth of 2.3% while contracting by 3.2% on a monthly basis.

Cumulatively, LSM declined by 1.5% during the first 10 months of this fiscal year. Notably, the government needs the LSM sector to grow by over 8% in the May-June period to achieve its claimed overall economic growth figure. The finance ministry said that, overall, 12 out of 22 sectors witnessed positive growth during this period, including textiles, wearing apparel, coke & petroleum products, beverages, and pharmaceuticals.