Overview of the Economy

Global Economic Review Consequently, mortgage expenses have

surged, and credit accessibility has
The global economy demonstrates
diminished, posing challenges for firms
remarkable resilience, characterized by
seeking to refinance their debt. This
steady growth as inflation gradually moves
situation has contributed to subdued
towards the target. This journey has been
investment activities in both business and
marked by significant events, including
residential sectors across various economies.
supply-chain disruptions in the wake of the
pandemic, a Russian-Ukraine conflict In the United States, growth is projected to
leading to a global energy and food crisis, increase to 2.7 percent in 2024, as it is
and a substantial surge in inflation. expected to maintain the strong momentum
Furthermore, central banks worldwide have seen in 2023, when growth reached 2.5
synchronized their monetary policy percent. On other hand, China, amidst both
tightening efforts. Despite numerous domestic and international challenges, is
pessimistic and gloomy forecasts, the global forecasted to undergo a moderated growth
economy capably avoided a recession. The rate, with projections dipping from 5.2
banking system demonstrated reasonable percent in 2023 to 5.0 percent in 2024.
resilience, with major emerging market Meanwhile, both Europe and Japan are
economies managing to avoid abrupt halts. grappling with significant economic
Furthermore, the inflation surge, despite its headwinds, with growth rates expected to
severity and the resulting cost-of-living hover around a modest 1.0 percent for both
crisis, has now been on a downward regions in 2024. Developing economies are
trajectory. struggling to recover from the impacts of the
pandemic, grappling with high debt levels
Global economic growth has slowed down
and investment shortfalls. Although Africa
from 3.5 percent in 2022 to 3.2 percent in
expects a slight improvement in growth from
2023 and is projected to continue at the same
3.4 percent in 2023 to 3.8 percent in 2024.
pace in 2024 and 2025, below the historical
(2000–19) annual average of 3.8 percent. It is noteworthy that the Least Developed
Global inflation is expected to fall from 6.8 Countries (LDCs) are still falling short of the
percent in 2023 to 5.9 percent in 2024 and 7.0 percent growth target outlined in the
4.5 percent in 2025. In response to SDGs. The persistent challenges of high
inflationary pressures, major central banks debt and limited fiscal space highlight an
have implemented restrictive policy urgent need for coordinated efforts to
measures by raising interest rates. address these issues and foster sustainable

i
Pakistan Economic Survey 2023-24

and inclusive economic growth. The amidst moderate global GDP growth,
momentum of international trade as a suggests multiple influencing factors:
catalyst for growth is waning, evidenced by geopolitical tensions are driving prices
a slowdown in global trade growth to 0.3 upward, investments in clean energy are
percent in 2023. However, resurgence is boosting metal demand, and China's
anticipated, with projections indicating a increased industrial and infrastructure
recovery to 3.0 percent in 2024. In 2023, spending is mitigating weaknesses in its
severe weather conditions, notably the property market.
hottest summer on record since 1880,
resulted in wildfires, floods, and droughts Generative AI made a notable entrance in
across the globe. These events impacted the late 2022, but its potential applications
economy, causing significant damage to expanded rapidly throughout 2023.
infrastructure, agriculture, and livelihoods. Economists have highlighted how AI could
usher in significant shifts for businesses and
Geopolitical tensions have emerged as the policymakers. This accelerated deployment
predominant risk facing the global economic could aid advanced economies in mitigating
landscape. Presently, conflicts in Eastern labor shortages and assist emerging
Europe and the Middle East, critical hubs for economies in elevating worker productivity
global food and energy distribution, pose and income levels. It is widely agreed that
imminent challenges. The specter of advanced economies will reap benefits
escalating tensions in the Middle East sooner, particularly in terms of productivity
evokes profound concern, particularly gains, compared to their lower-income
considering the region's pivotal role, counterparts. The World Economic Forum
accounting for nearly 30 percent of the views the rise of AI, particularly generative
world's oil production. Recent disruptions in AI, as part of a multifaceted transformation
the Red Sea have already hampered shipping heralding a new era of global economic
via the Suez Canal, which facilitates almost expansion with a potential to increase
30 percent of global container traffic. The automation, productivity growth, efficiency,
challenge for policymakers’ lies in securing and data analysis in economies and
macroeconomic stability and sustaining debt industries.
levels while navigating geopolitical hurdles
and promoting growth in the medium term. 2024 rises above the usual label of 'an
election year'; it emerges as 'the election
Heightened geopolitical tensions exacerbate year'. An unprecedented number of voters
market uncertainties, impeding investment will participate in national elections, with at
flows and hindering economic growth. A least 65 countries scheduled to hold them,
surge in oil prices could ensue if tensions in encompassing nearly half of the world's
the Middle East intensify. Such an population (4.2 billion people). These
occurrence would amplify global elections would offer a chance for nascent
inflationary trends and impede global democracies to take hold and the outcomes
growth. Copper prices have recently reached of these polls will hold significant
a two-year peak due to supply concerns and consequences for many years to come.
indications of stronger global industrial Populist leaders, hyper polarization, and the
output. The ongoing elevation of commodity proliferation of mis- and disinformation,
prices, compared to pre-pandemic levels, accelerated by generative artificial

ii
 Overview of the Economy

intelligence, pose threats to democratic account deficits, and signaling excessive

norms. While not every election may usher demand and overheating. Additionally, the
in substantial governmental or policy economy suffered a significant setback due
changes, collectively, their results will shape to the catastrophic floods in FY 2023, which
an increasingly precarious global landscape. not only obliterated growth prospects but
also inflicted extensive damages equivalent
As the global economy approaches a soft to 4.8 percent of GDP.
landing, central banks prioritize a smooth
reduction in inflation, emphasizing the need During previous year, i.e., FY 2023, the
for timely policy adjustments while government confronted four critical
advocating for medium-term fiscal challenges that threatened Pakistan's socio-
consolidation to ensure debt sustainability. economic growth: achieving sustainable
Supply-enhancing reforms are urged to macroeconomic stability, reducing poverty,
stimulate growth and accelerate ensuring fiscal consolidation, and
convergence toward higher income levels. addressing external account vulnerabilities.
However, challenges persist, including At the start of FY 2024, the overarching
geopolitical tensions, potential currency vision remains to attain sustainable GDP
fluctuations, and financial sector growth with price stability over the medium
vulnerabilities. Multilateral cooperation is term to overcome these challenges. The
essential to mitigate risks, particularly in elected government is putting its efforts into
addressing climate change and promoting preparing and implementing home-grown
green energy transition. Strengthening macroeconomic and structural reforms,
cross-border cooperation is vital to maintain aimed at job creation and poverty
stable trade policies and resolve debt issues alleviation. Efforts have been made to
effectively, while fostering innovation and rebuild investor confidence by addressing
ensuring responsible technology use. macroeconomic imbalances through an
optimal policy mix. Simultaneously, the
Pakistan Economic Review government has strived to protect the most
The restoration of macroeconomic stability vulnerable populations with adequately
is imperative for establishing a platform to funded social safety nets and targeted
stimulate growth, enhance employment, and subsidies.
improve the overall quality of life for the
The economy of Pakistan embarked on a
people. Recent years have been
stabilization phase in FY 2024.
characterized by exacerbated challenges that
Government’s dedicated efforts to complete
have persisted since FY 2022. Pakistan has
2023 Stand-By Arrangement (SBA) have
encountered multiple global shocks,
yielded significant progress in reinstating
including supply chain distortions from the
economic stability. The economy has
Russia-Ukraine conflict, elevated global
experienced a resurgence in moderate
inflationary pressures leading to monetary
growth and a reduction in external pressures.
tightening, and oil price shocks due to
Although inflation remains high, it is now on
heightened geopolitical tensions in the
Middle East. In FY 2022, Pakistan's a downward trend. Moving forward, the
newly elected government is putting efforts
economy experienced an unsustainable 6.1
to leverage this stability by maintaining
percent growth rate driven by domestic
robust macroeconomic policies and
demand, leading to high fiscal and current

iii
Pakistan Economic Survey 2023-24

implementing structural reforms to achieve aimed at lowering energy costs and

stronger, more inclusive, and sustainable enhancing sector efficiency. Public service
growth. The performance of the government delivery will be improved through the
in revenue collection and disciplined federal restructuring and potential privatization of
expenditure control facilitated the state-owned enterprises. Furthermore, the
generation of a substantial primary surplus government is committed to creating a
in first three quarters of FY 2024.The State conducive environment for private sector
Bank of Pakistan adopted tight monetary investment by ensuring fair competition and
policy stance to bring inflation to moderate enhancing governance. These
levels. comprehensive reforms underscore the
government's commitment to building a
These measures along with recent trends in resilient and prosperous Pakistan for its
most macroeconomic variables suggest that citizens.
the disciplined implementation of the
macroeconomic stabilization programme Executive Summary
has started paying dividends in the current Growth and Investment: The real, fiscal,
fiscal year. The efforts contributed to and external sectors, as well as financial
containing the fiscal deficit at 3.7 percent of markets, have demonstrated resilience and
GDP during the first three-quarters of FY steady improvement. In fiscal year 2024,
2024. Likewise, in July-March FY 2024, the Pakistan's GDP increased by 2.38 percent,
primary balance achieved a surplus of Rs with strong growth in agriculture sector
1,615.4 billion (1.5 percent of GDP), against which expanded by 6.25 percent compared
the surplus of Rs 503.8 billion (0.6 percent to 2.27 percent growth in last year. While
of GDP) experienced last year, attributed to both the industrial and services sectors grew
a slowdown in the growth of non-markup by 1.21 percent. The GDP, valued at current
expenditures. The current account balance market prices, reached Rs 106,045 billion
posted a surplus of US $ 434 million in (US $ 375 billion), with a 26.4 percent
March 2024 and US $ 491 million in April increase from the previous year's Rs 83,875
2024 marking that the efforts of the billion (US $338 billion). The per capita
government are yielding fruitful results. The income rose to US $ 1,680, from US $ 1,551
current account deficit is likely to decelerate in previous year, driven by the improved
from as high as US $ 17.5 billion in FY 2022 economic activity and a stable exchange
to around US $ 0.5 billion (0.1 percent of rate. The investment-to-GDP ratio for FY
GDP) by the end of the out-going fiscal year. 2024 remained 13.14 percent, a decrease
The government is dedicated to driving the from 14.13 percent in FY 2023, attributed to
country towards robust, inclusive, and a global slowdown, political instability in
sustainable economic growth. This the country along with restrictive
ambitious agenda involves reinforcing macroeconomic policies. Gross Fixed
public finances through fair and efficient Capital Formation (GFCF) stood at Rs
taxation while significantly increasing 12,122.5 billion, an 11.4 percent increase
investments in education, healthcare, social over the FY 2023. Both private and public
safety nets, and climate resilience initiatives. investments grew by 15.8 percent and 18.2
To ensure a sustainable energy future, the percent, respectively. Nevertheless, the
government plans to implement reforms national saving rate remained steady,
recorded at 13.0 percent in FY 2024.
iv
 Overview of the Economy

Agriculture: The agriculture sector has agricultural value addition and 0.56 percent
shown a growth of 6.25 percent in 2023-24 to GDP, grew by 3.05 percent, compared to
compared to 2.27 percent last year, driven by a significant 16.63 percent growth last year.
healthy growth in important crops. The fishing sector, which represents 1.30
Specifically, there was a significant growth percent of agricultural value addition and
of 16.82 percent in the production of major 0.31 percent of GDP, grew by 0.81 percent,
crops. Wheat production has witnessed a up from 0.35 percent the previous year.
record growth of 11.6 percent, reaching 31.4 Water availability, during Kharif 2023,
million tonnes compared to 28.2 million increased to 61.9 Million Acre Feet (MAF)
tonnes last year. Cotton production, which from 43.3 MAF in Kharif 2022, meeting the
was severely damaged by floods and rains requirements for Kharif crops. For Rabi
last year, recorded 10.2 million bales 2023-24, water availability was recorded at
compared to 4.9 million bales last year, 30.6 MAF, showing an increase of 4.1
growing by 108.2 percent. Rice production percent over Rabi 2022-23.
also saw a significant increase, reaching 9.9
million tonnes compared to 7.3 million Overall domestic production of fertilizers
tonnes last year, representing a growth of during FY 2024 (July-March) increased by
34.8 percent. 17.3 percent to 3.253 million tonnes
compared to 2.773 million tonnes in the
In contrast, sugarcane and maize production same period of FY 2023. Fertilizer imports
declined by 0.4 percent and 10.4 percent, also increased by 23.7 percent, reaching 524
respectively, with sugarcane production at thousand tonnes. Consequently, the
87.6 million tonnes compared to last year's availability of fertilizer increased by 18.1
88.0 million tonnes, and maize production at percent to 3.776 million tonnes. Total
9.8 million tonnes compared to 11.0 million offtake of fertilizer nutrients also saw an
tonnes last year. The negative growth in 18.7 percent increase, reaching 3.957
sugarcane and maize has been offset by the million tonnes. This high offtake is
substantial growth in wheat, cotton, and rice. attributed to the extraordinarily low offtake
Other crops have also shown growth, during the previous year due to floods.
increasing by 0.90 percent compared to a Although gas prices for urea plants
decline of -0.92 percent last year. This increased, the rise in average prices of urea
growth is attributed to increase in the and other nitrogen-containing fertilizers was
production of fruits (8.40 percent), disproportionately high compared to the
vegetables (5.77 percent), and pulses (1.45 increase in gas prices.
percent). Additionally, cotton ginning,
which has a share of 0.32 percent in GDP During July-March FY 2024, agricultural
and 1.34 percent in agricultural GDP, grew lending by financial institutions totaled Rs
by 47.23 percent due to the significant 1,635.2 billion, achieving 72.7 percent of the
increase in cotton production. overall annual target and marking a 33.8
percent increase from Rs 1,221.9 billion
Livestock, which accounts for 60.84 percent disbursed during the same period last year.
of the agricultural sector and 14.63 percent The outstanding portfolio of agricultural
of GDP, grew by 3.89 percent in 2023-24, up loans increased by Rs 105.8 billion, reaching
from 3.70 percent last year. The forestry Rs 818.7 billion at the end of March 2024,
sector, contributing 2.33 percent to compared to Rs 712.9 billion at the end of

v
Pakistan Economic Survey 2023-24

March 2023, reflecting a 14.8 percent respectively. However, some minerals

growth. The number of outstanding experienced negative growth, such as
borrowers reached 2.70 million by the end of Natural Gas (-2.0 percent), Dolomite (-2.1
March 2024. percent), Sulphur (-20.3 percent), Barytes
(-10.9 percent), and Ocher (-24.8 percent).
During FY 2024 (July-April), total fish
production reached 720.9 million metric Fiscal Development: In Pakistan, fiscal
tonnes, comprising 410.9 million metric policy continues to grapple with the legacy
tonnes from marine fisheries and the of persistently high fiscal deficits and debt,
remainder from inland waters fisheries. resulting from unprecedented expenditures
Pakistan’s major fish buyers during FY 2024 and moderate growth in revenues. These
(July-March) included China, Thailand, challenges have been exacerbated by various
Malaysia, the Middle East, Sri Lanka, and factors that emerged at the global and
Japan. A total of 206.970 thousand metric domestic levels over the past two years, such
tonnes of fish and fish preparations were as rising flood-related expenditures, a global
exported, earning approximately US $ economic slowdown, geopolitical tensions,
534.217 million. supply chain disruptions, high inflationary
pressures, higher interest payments, import
Manufacturing and Mining: Large-Scale compression, and contraction in industrial
Manufacturing (LSM) remained in negative activities. All these factors have created
territory at -0.1 percent during July-March numerous challenges for the already
FY 2024, an improvement compared to the struggling economy, especially in terms of
-7.0 percent growth in the corresponding fiscal sustainability.
period last year. During this period, 11 out
of 22 sectors witnessed growth, including To address these challenges, fiscal
Food, Wearing Apparel, Leather, Wood consolidation efforts were implemented in
Products, Coke & Petroleum Products, line with the budget for 2023-24. These
Chemicals, Pharmaceuticals, Rubber efforts contributed to improving revenues;
Products, Machinery & Equipment, however, a significant challenge emerged
Furniture, and Other Manufacturing (e.g., from mounting pressure on expenditures,
footballs). On a year-on-year (Y-o-Y) basis, mainly caused by higher markup payments.
LSM increased by 2.0 percent in March However, the fiscal deficit during July-
2024 against a contraction of 26.4 percent in March FY 2024 recorded at 3.7 percent of
the same month last year. However, on a GDP, the same as last year. Meanwhile, the
Month-on-Month (M-o-M) basis, LSM primary balance posted a surplus of Rs
declined by 9.4 percent in March 2024 1615.4 billion (1.5 percent of GDP) during
compared to a decrease of 3.1 percent in July-March FY 2024, compared to the
February 2024. surplus of Rs 503.8 billion (0.6 percent of
GDP) last year.
The Mining and Quarrying sector recorded
at 4.9 percent during FY 2024 against a dip Total expenditure increased by 36.6 percent
of 3.3 percent last year. During July-March in July-March FY 2024, compared to 18.7
FY 2024, production of major minerals such percent last year. Within total expenditures,
as Coal, Chromite, Iron Ore, Soapstone, current expenditures grew by 33.4 percent
Magnesite, and Marble witnessed growth of due to a 54 percent increase in markup
37.7, 36.9, 63.9, 29.3, 34.4, and 23.2 percent, payments during the first nine months of FY
vi
 Overview of the Economy

2024. In contrast, prudent expenditure policy, keeping the policy rate at 22 percent
management strategies led to non-mark-up from July to April of FY 2024, aiming to
current spending growth of 20.4 percent control inflationary pressures. During the
relative to mark-up expenditures. period July-March FY 2024, Broad Money
(M2) grew by 7.0 percent, reaching Rs
Total revenues grew by 41.0 percent in July- 2,216.1 billion, compared to a 4.4 percent
March FY 2024, compared to the growth of growth to Rs 1,211.5 billion during the same
18.1 percent observed last year. The period last year. This expansion in M2
substantial increase in revenues has been stemmed from both Net Foreign Assets
primarily attributed to a sharp rise in non-tax (NFA) and Net Domestic Assets (NDA).
revenues, which grew by 90.7 percent, Within M2, the NFA of the banking system
driven by higher receipts from SBP profit, expanded by Rs 529.7 billion, a significant
petroleum levy, markup (PSEs and others), improvement from the decline of Rs 2,073
and royalties on oil/gas, etc. Total tax billion last year. This expansion reflects an
collection (federal and provincial) grew by improved balance of payments position,
29.3 percent during July-March FY 2024, with a significantly contained current
compared to the growth of 16.5 percent last account deficit and increased bilateral and
year. multilateral FX inflows, contributing to the
country’s growing FX reserves. The current
FBR net provisional tax collection grew by account deficit was reduced by 87.5 percent
30.6 percent to Rs 7,361.9 billion in July- to US $ 0.5 billion during July-March FY
April FY 2024, compared to Rs 5,637.9 2024, compared to US $ 4.1 billion last year.
billion last year. Domestic tax collection Consequently, Pakistan’s total FX reserves
registered a 32.3 percent increase, reaching increased by US $ 3.6 billion during this
Rs 6,464.3 billion up from Rs 4,886.1 billion period, in contrast to a depletion of US $ 6.3
last year. Considerable improvement in tax billion during the same period last year.
collection has been observed, supported
by various tax-enhancing measures The NDA of the banking system increased
implemented under the Finance Act 2023. by Rs 1,686.5 billion, compared to Rs
3,284.5 billion last year. Private Sector
Despite significant challenges, the fiscal Credit (PSC) expanded by Rs 188 billion,
performance during the first nine months of with a year-on-year growth of 1.0 percent,
FY 2024 is a testament to the government’s compared to an expansion of Rs 300 billion
resolve to continue consolidation efforts to (5.0 percent growth) during the same period
strengthen revenue mobilization and control last year. The deceleration in PSC is
expenditures. The government is making attributed to slow economic activities, an
intensive efforts through various reforms uncertain economic environment, and high
and initiatives on both the revenue and borrowing costs. Within PSC, the credit
expenditure sides. These reforms will not demand from private sector businesses
only reduce dependency on borrowing and increased by Rs 308.0 billion, compared to
mitigate debt-related risks but also create Rs 271 billion during the same period last
sufficient space for social assistance and year. The demand for working capital loans
development spending. expanded by Rs 275.7 billion, compared to
Rs 113.3 billion last year. However, the
Money and Credit: The State Bank of
demand for fixed investment loans was
Pakistan has maintained a tight monetary
lower at Rs 47.2 billion in July-March FY
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Pakistan Economic Survey 2023-24

2024, compared to an offtake of Rs 147.5 issued and 26 privately placed debt

billion during the same period last year. securities, raising a total amount of Rs
Factors contributing to this sluggish trend 1,282.9 billion and Rs 153 billion
include high borrowing costs, import respectively during July-March FY 2024. As
restrictions on raw materials and plant of March 31, 2024, 107 previous corporate
machinery, weak medium-term business debt securities worth Rs 1,175.3 billion
prospects, political uncertainty, and the remained outstanding. During July-March
rationalization of subsidized Long Term FY 2024, 3.39 million lots of different
Financing Facility (LTFF) Bank deposit commodity futures contracts, including
mobilization increased by Rs 2,703.0 billion, gold, crude oil, and US equity indices, worth
compared to Rs 512 billion last year, driven Rs 4.08 trillion were traded on the Pakistan
by favorable returns on bank deposits. Mercantile Exchange Limited, which is 14.5
Looking ahead, the Monetary Policy percent higher than the same period last
Committee expects to bring down inflation year. SECP issued 02 certificates of Shariah-
to the target range of 5-7 percent by compliant companies and 52 certificates of
September 2025. Shariah-compliant securities to companies
under the Shariah Governance Regulations,
Capital Markets and Corporate Sector: 2023, for the development of the Islamic
The performance of major world stock Capital Market during July-March FY 2024.
markets, including those of the US, France, Similarly, SECP issued certificates of
India, China, and Pakistan, showed a Shariah compliance for Shariah-compliant
positive trend, except for the Shanghai Stock securities/sukuk worth Rs 213.4 billion,
Exchange (SSE) Composite Index of China. compared to Rs 107.7 billion during the
This exception was primarily attributed to same period last year. Out of the total 524
the property sector crisis in China, which securities listed at PSX, 264 (50.38 percent)
negatively impacted investor sentiments. In are Shariah-compliant, with a market
contrast, the KSE-100 index witnessed a capitalization of Rs 6,251.35 billion (66.17
significant increase of 62 percent during percent) out of the total market capitalization
July-March FY 2024 compared to other of Rs 9,447.69 billion as of March 31, 2024.
indices. This surge in confidence indicates
positive market sentiments and reflects Inflation: The CPI inflation for the period
investors’ trust in the Pakistan Stock July-April FY 2024 recorded at 26.0 percent
Exchange, largely due to the successful as against 28.2 percent during the same
implementation of the IMF’s programme period last year. The other inflationary
under the SBA, the encouraging indicators like Sensitive Price Indicator
performance of the external sector, and the (SPI) recorded at 30.2 percent as against
formation of a new political government. 31.7 percent last year. Wholesale Price
Similarly, the market capitalization of the Index (WPI) recorded at 22.4 percent in
Pakistan Stock Exchange was recorded at Rs July-April FY 2024 compared to 34.1
6,369 billion on June 30th, 2023, and closed percent same period last year.
at Rs 9,448 billion at the end of March 2024,
marking a substantial increase of 48.3 The coordinated policy response in Pakistan
percent. has significantly reduced inflation to 17.3
percent in April 2024 from its peak of 38
In the debt market, there were 10 publicly percent in May 2023. Similarly, Food

viii
 Overview of the Economy

inflation (Urban) declined from 48.1 percent surging delivery of digital services. Within
in May 2023 to 11.3 percent in April 2024. Pakistan, the external economic landscape
It is expected that inflation will continue to showed signs of improvement during July-
decrease in the upcoming months. The March FY 2024. This improvement was
decline in inflation is broad-based, reflecting primarily driven by subdued domestic
fiscal consolidation, smooth supplies of food demand, a softening in global commodity
items, favorable global commodity prices, prices, and the successful negotiation and
and the base effect. execution of a nine-month SBA with the
IMF. Notably, the current account deficit
The government's top priority to address the was substantially contained, decreasing by
inflation problem. The volume of the 87.5 percent to US $0.5 billion compared to
Ramadan Relief Package was increased US $4.1 billion recorded in the preceding
from Rs 7.5 billion to Rs 12.5 billion. This year. This reduction resulted from a rise in
package included support for USC, exports coupled with a continued decline in
beneficiaries of BISP, and mobile units that imports. During July-March FY 2024,
provided low-cost food items. This has remittances were recorded at US $ 21.0
helped to ease the financial burden on the billion as against US $ 20.8 billion last year.
intended recipients. Additionally, However, it is important to note a sharp
administrative actions have been taken increase in interest payments on external
against illegal foreign exchange companies, debt and the repatriation of profits and
and measures to curb smuggling and dividends. Supported by the IMF's SBA and
hoarding in the commodity market have loans from other creditors, the financial
contributed to the stability of exchange rates account experienced a net inflow of US $ 4.2
and the smooth supply of commodities. billion during the period. Consequently,
Provincial governments and the ICT gross foreign exchange reserves swelled to
administration are implementing strict US $ 8.0 billion by March 2024, marking a
administrative measures to ensure a smooth significant increase from US $ 4.4 billion
supply of goods in the market. recorded in June 2023. Additionally, the
Trade and Payments: In the global context, PKR appreciated by around 3.0 percent till
the escalation of trade tensions and the March 2024 compared to end June 2023.
shifting geo-economic landscape have Public Debt: Total public debt was recorded
created substantial challenges for at Rs 67,525 billion at end-March 2024.
international trade. Global merchandise Domestic debt was recorded at Rs 43,432
trade witnessed a downturn, experiencing a billion while external public debt was
5 percent decline to US $ 24.01 trillion, recorded at Rs 24,093 billion (US $ 86.7
while commercial service trade observed a billion). Public debt portfolio witnessed
surge of 9 percent, reaching US $ 7.54 various positive developments during first
trillion. Decline in merchandise exports was nine months of outgoing fiscal year which
influenced by various factors including are highlighted as follows:
diminished commodity prices, decreased
trade volumes, and fluctuations in exchange ▪ Around 88 percent of financing of fiscal
rates. Conversely, the surge in commercial deficit was carried out through domestic
services trade can be attributed to the markets, whereas 12 percent from
recovery in international trade and the external sources.

ix
Pakistan Economic Survey 2023-24

▪ Within domestic debt, the Government 1.0 bn bilateral deposit from UAE for
relied on long-term domestic debt balance of payment support.
securities (predominantly on: (i) floating The Government’s strategy to reduce its debt
rate Pakistan Investment Bonds (PIBs) burden to a sustainable level includes
and, (ii) Sukuk for financing of its fiscal commitment to run primary budget
deficit and repayment of debt maturities. surpluses and follow an exchange rate
The Government was able to retire regime based on economic fundamentals.
Treasury Bills (T-bills) amounting to Rs Additionally, the Government is also
0.8 trillion which led to a reduction of committed to ensure fiscal discipline to
short-term maturities. maintain debt sustainability over the
▪ To make debt management operations medium term. With a narrower fiscal deficit,
more competitive and improve public debt is projected to enter a firm
transparency in borrowing operations as downward path while the Government’s
well as diversify the investors base, efforts to improve maturity structure and
government undertook amendments in expansion of debt instruments-base would
the Treasury Bills Rules, 1998 and Ijara help to meet the financing requirements
Sukuk Rules, 2008. Pursuant to these efficiently.
amendments, government carried out
maiden auction of 1-year fixed rate Ijara Education: The cumulative education
Sukuk on PSX in December 2023. The expenditures by the Federal and Provincial
whole Sukuk auction system has now Governments in FY2023 amounted to
been shifted to PSX. approximately 1.5 percent of GDP.
Expenditures on education-related activities
▪ In addition to existing 3-year and 5-year during FY 2023 witnessed a 13.6 percent
Ijara Sukuk instruments, Government increase, reaching Rs 1,251.06 billion from
introduced a 1-year discounted Sukuk Rs 1,101.7 billion. According to the Labor
instrument with a target to diversify Force Survey 2020-21, the national literacy
shariah compliant instrument base and rate remained at 62.8 percent. Literacy rates
give more options to investors with increased in all provinces: Punjab from 66.1
appetite towards Islamic investments. percent to 66.3 percent, Sindh from 61.6
Government successfully issued Shariah percent to 61.8 percent, Khyber
Compliant Sukuk instruments Pakhtunkhwa from 52.4 percent to 55.1
amounting to around Rs 1.5 trillion percent, and Balochistan from 53.9 percent
▪ External budgetary disbursements were to 54.5 percent. In the Pakistan Social and
recorded at US $ 6.3 bn, of which US $ Living Standards Measurement (PSLM)
2.7 bn was received from multilateral 2019-20, the Out-of-School Children
sources, US $ 2.8 bn from bilateral (OOSC) rate was 32 percent in the country,
development partners and US $ 0.8 bn with a higher rate of female OOSC (37
was recorded as inflow from Naya percent) than males (27 percent). Punjab had
Pakistan Certificates. a 24 percent OOSC rate, Sindh 44 percent,
Khyber Pakhtunkhwa 32 percent, and
▪ In addition to above, government also
Balochistan 47 percent. In all provinces,
received US $ 1.9 bn under the IMF’s
more females were out of school than males.
Stand-By Arrangement (SBA) and US $
The government has taken various

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 Overview of the Economy

measures/initiatives to tackle the issue of mainstreaming religious education, skill

OOSC and improve the overall situation. development, and promoting awareness.
Government resources are geared toward
According to the Higher Education making the education sector more inclusive
Commission (HEC), there are 263 and effective and ensuring equitable access
institutions (Public Sector: 154 and Private across the country.
Sector: 109) in the country with 61,204
thousand teachers in both public and private Health and Nutrition: The government is
sectors are functioning. During FY 2024, the committed to ensuring universal public
government allocated Rs 69.7 billion health facilities, as evidenced by the Health
(including Rs 10.0 billion for PM’s Laptop Security summit held in February 2024 in
Scheme) to HEC for the implementation of Islamabad. The country is dedicated to
169 development projects (139 ongoing & meeting SDGs goal 3, specifically related to
30 newly approved projects) of Public the health sector. key indicators of the health
Sector universities/HEIs. Moreover, skill sector also depicting improvement in the
development, a pivotal aspect of the health profile of the country. The PSDP
educational framework, emerges as a top allocation for the health sector for FY 2024
government priority, with notable was Rs 25.3 billion, while total health
achievements and ongoing projects. Central expenditures decreased by 8.3 percent to Rs
to this endeavor is the vital role of the 843.2 billion in FY 2023 from Rs 919.4
National Vocational & Technical Training billion in FY 2022. The government has
Commission (NAVTTC), in delivering launched several initiatives, including the
professional training to the youth and skilled PM National Program for the Elimination of
workforce, thereby bolstering national Hepatitis C, the programme for prevention
productivity, and facilitating manpower and control of diabetes, and the expanded
export abroad. programme on immunization. Additionally,
in close coordination with the Provinces and
Federal as well as provincial governments Federal areas, the government rolled out a
have taken various initiatives to elevate mobile application for the first time in
education standards, aligning with their Pakistan to digitize child-level data at the
commitment to achieve Goal 4 of the SDGs. national level, a step toward promoting e-
These measures encompass a spectrum of government.
strategies aimed at enhancing access to
quality education, including establishing Furthermore, for cancer treatment, Atomic
new schools, upgrading existing ones, Energy cancer hospitals are treating almost
improving learning environments, digitizing 80 percent of cancer patients in the country,
educational institutions, enhancing while the Mental Health and Physiological
resilience, promoting distance learning, and Support programme is operating as a pilot
capacity building for teachers, particularly in project under the Ministry of Planning,
science education. The present government Development, and Special Initiatives for
is putting efforts and resources into the addressing mental health issues. Initiatives
education sector, aiming to introduce a have also been launched to address the
uniform curriculum, capacity building of nutritional profile of Pakistan, including the
teachers, establishment, renovation, and up- Pakistan Nutrition Initiative (PANI) and the
gradation of schools and colleges, National Multi-sector Nutrition Program to

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Pakistan Economic Survey 2023-24

Reduce Stunting & Other Forms of absorb the growing labour force, especially
Malnutrition, with an allocation of Rs 8.5 the educated youth. The government is
billion. The Narcotics Control Division has offering skill-training programmes like the
launched the Precursor Information "Prime Minister's Youth Skill Development
Management System (PIMS) to control the Programme" and facilitating access to
illegal transit of narcotics. These policies are finance through the "Prime Minister's Youth
expected to reduce disparity, improve Business and Agriculture Loan Scheme"
accessibility and build resilience against to encourage youth entrepreneurship.
emerging health challenges in the country. Moreover, the government is also exploring
overseas employment opportunities, which
Population, Labour Force, and will not only reduce the unemployment
Employment: The Population and Housing burden in the country but also enhance
Census is a vital national exercise linked to remittances.
providing data for key policy-making
matters. Pakistan’s Seventh Population and Transport and Communication: The
Housing Census, the largest digitization transport and communication sectors are a
exercise in South Asia, began on March 1st, vital component of a country's infrastructure
2023. The Council of Common Interest and economy, facilitating the movement of
(CCI) approved the results of the First people and goods. It plays a crucial role in
Digital Census of Pakistan on August 5th, economic growth, trade facilitation, job
2023. According to the 7th National creation, social connectivity, access to
Population and Housing Census, the total education and healthcare, emergency
population is 241.5 million, showing an services, environmental sustainability, and
increase of 16.3 percent compared to the national security. Modernizing
population in 2017 (excluding Azad Jammu infrastructure and enhancing regional
and Kashmir and Gilgit-Baltistan). The connectivity have been key priorities for the
population density increased from 260.88 government, as outlined in Pakistan Vision
persons per square km in 2017 to 303 2025. Significant investment is allocated
persons per square km in 2023. At the annually to this sector to achieve these
national level, the population growth rate is objectives.
2.55 percent, while the growth rate in urban
areas is 3.65 percent, higher than the Pakistan's exclusion from the World Bank's
population growth rate in rural areas, which Logistics Performance Index (LPI) in its
is 1.90 percent. The urban population has latest edition in 2023 is attributed to
also increased from 75.67 million to 93.75 inadequate assessments by logistics
million between 2017 and 2023 due to the providers. The LPI ranks only 139 countries.
availability of better education However, the World Bank's LPI 2018
ranked Pakistan 122ndout of 160 countries in
infrastructure, health facilities, and job
terms of ease of moving goods with speed
opportunities.
and reliability. This underscores the need for
According to the Labour Force Survey Pakistan to intensify efforts to enhance its
(LFS) 2020-21, the unemployment rate is logistics services, transport, and trade-
6.3 percent. Pakistan is a country with a related infrastructure. In FY 2024, the
young population; thus, there is a need to transport and communication sector
create enough employment opportunities to contributed 20.51 percent to GDP of
country, with a share of 23.0 percent in the
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 Overview of the Economy

services sector. The government has been ensure energy security and climate change
investing significantly in this sector to mitigation. The Private Power Infrastructure
develop a modern and well-integrated Board is facilitating twenty-four (24) power
transportation and communication system. generation projects (including 22 renewable
An allocation of Rs 264.8 billion has been projects), having an installed capacity of
earmarked for the sector in the FY 2024. 7,460 MW, which will be completed by
2032.
The transport sector and road infrastructure
have a lasting impact on a country's As of end March 2024, electricity’s total
economic prosperity. NHA has played a installed capacity is 42,131 MW, wherein
leading role in the development of Pakistan's 59.4 percent relies on thermal sources. On
road infrastructure, with a network the other hand, out of total electricity
comprising 48 National Highways, generation of 92,091.0 GWh, the share of
Motorways, and Strategic Roads, totaling hydel, nuclear, and renewable is combined
14,480 km. In the PSDP 2023-24, NHA has as 54.1 percent during July-March FY 2024,
a total budget of Rs 156.50 billion for 123 The monthly share of nuclear in the
projects, including 68 ongoing projects with generation mix remained between 12.8 to
an allocation of Rs 99.36 billion and 52 new 25.8 percent. Moreover, the consumption of
schemes with an allocation of Rs 48.12 petroleum products has shown a decline of
billion. Additionally, three Build Operate 7.2 percent (from 13.3 million tonnes to 12.3
Transfer (BOT) Schemes included in the million tonnes), during the same period,
PSDP 2023-24, with an allocation of Rs 9.02 which can be attributed to the decline in
billion. economic activity and increase in product
prices. For instance, the transport sector
Energy: Pakistan’s energy sector is paving
alone has witnessed a decline in
the way towards the transition from
consumption of petroleum products from
imported fossil fuel to renewable energy
around 10.2 million tonnes to 9.8 million
sources, as demonstrated by substantial
tonnes (a decline of 4.8 percent). Total
investments in wind and solar power.
imports of petroleum products also declined
According to Indicative Generation
to 11,047 thousand MT at a value of US $
Capacity Expansion Plan (IGCEP-2022), no
8.36 billion. The average natural gas
new power plants based on imported fossil
consumption was about 3,207 million Cubic
fuels will be inducted. Existing fossil fuel
Feet per day (MMCFD) including 695
plants, particularly those using furnace oil,
MMCFD volume of RLNG from July to
are expected to be phased out by 2031. The
March FY 2024. The total coal consumption,
share of electricity from hydel, wind, and
for the first nine months of the current fiscal
solar sources is projected to rise from 28
year, stands at 17,279 thousand MT.
percent, 4 percent, and 1 percent,
respectively, to 39 percent, 10 percent, and Information Technology and
10 percent, respectively, increasing the total Telecommunication: The Information
share of green electricity in the generation Technology and Telecommunication sector
mix to approximately 59 percent. in Pakistan plays a pivotal role in driving
Accordingly, the government has been economic growth and improving the quality
focusing on strengthening the regulatory of life for citizens through digital
framework and incentivizing private sector transformation. Sustained investment and
investment in renewable energy to help
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Pakistan Economic Survey 2023-24

robust policy support are imperative to fully entrepreneurs have been empowered
leverage the potential of this dynamic sector. through the programme.
The Vision of Digital Pakistan is driving
comprehensive digital transformation across During FY 2024 (July-March), the telecom
various sectors, promising to unlock new sector showed resilience, expanding its
services, and generating telecom revenues
opportunities for economic growth,
estimated at Rs 735 billion. As of March
innovation, and inclusive development in the
2024, total telecom subscriptions (Mobile
economy. The China-Pakistan Digital
and Fixed) reached 194 million, with the
Corridor and investments in the digital total teledensity in the country reaching 80.7
economy, along with the Joint Working percent. During FY 2024 (July-March), the
Group (JWG), are fostering innovation, telecom sector contributed Rs 213 billion
boosting investment cooperation, and directly to the GDP. Information
promoting the deployment of new digital Technology and telecom enable digital
technologies. transformation in sectors like finance,
healthcare, education, agriculture and
According to Kearney’s 2023 Global
government services, leading to improved
Services Location Index, Pakistan is the service delivery, greater accessibility, and
most financially attractive IT&ITeS efficiency gains, thereby driving economic
outsourcing destination in the world. The development.
development of Pakistan’s ICT sector can be
gauged from the fact that over 20,000 Social Protection: BISP, a cash transfer
IT&ITeS companies are registered with the programme, targets impoverished women,
SECP, comprising both domestic and aligning with SDGs. With headquarters in
export-oriented enterprises. During FY 2024 Islamabad and 16 zonal offices, it operates
through 154 district offices and 257 sub-
(July-March), ICT sector exports reached
divisional offices nationwide. The
US $ 2.283 billion, the highest among all
government allocated Rs 466 billion in FY
Services (39.31 percent of the total export of
2024, out of which Rs 328.96 billion has
services), with 'Other Business Services' been released to execute BISP conditional
trailing at US $ 1.205 billion. Pakistan-based and unconditional Cash Transfer
freelancers contributed foreign exchange programmes. Under the Kafalat
earnings to the economy through Unconditional Cash Transfer Program, Rs
remittances of US $ 350.15 million during 257.47 billion has been disbursed to 9.4
FY 2024 (July-March). PSEB launched its million beneficiaries, while Rs 55.97 billion
first-ever women's software technology park has been disbursed under the Conditional
at the Women's University of Bagh AJK Cash Transfer programme.
during FY 2024. Till 31st March, 2024, the
PPAF persists in aiding communities
NICs have incubated over 1,480 startups,
through interest-free loans and improved
with more than 710 graduated successfully,
access to infrastructure, energy, healthcare,
generating over 128,000 jobs, receiving a
education, livelihoods, and disaster
total investment of Rs 23 billion plus and resilience. Its services extend to 149 districts
generating a combined revenue of more nationwide, encompassing all provinces and
than Rs 16 billion. Over 2,800 women regions of the country. PPAF disbursed an
amount of Rs 1.99 billion during July-March

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 Overview of the Economy

FY 2024 through its Partner Organizations schemes.

across the country for various programmes
Pakistan's social protection system holds
funded by donors and its own resources.
significant potential in addressing poverty
Pakistan Bait-ul-Mal plays a vital role in and vulnerability, necessitating enhanced
alleviating poverty through targeted coordination among various agencies.
assistance for the most vulnerable. It Establishing a national social protection
supports needy individuals, widows, framework is crucial to harmonize federal
orphans, and people with disabilities, with a and provincial efforts, minimizing resource
focus on rehabilitation. This includes duplication and wastage.
educational assistance for orphans, stipends
Climate Change: Pakistan has been
for outstanding students, residential
recognized as one of the top ten nations most
accommodations, free medical treatment,
affected by climate change globally,
and funding for charitable institutions. For
according to German Watch’s Climate Risk
FY 2024, Rs 7.67 billion is allocated, of
Index. The country is experiencing
which Rs 4.32 billion was utilized from July
unpredictable weather patterns, leading to
to March for the execution of its core
occurrences such as flash floods, severe
projects and schemes.
droughts, glacial lake outbursts, intense heat
The Zakat system promotes fair wealth waves, and erratic rainfall. Consequently, its
distribution, serving as a safeguard against ecosystems and landscapes are steadily
poverty and reducing community inequality. deteriorating. Forest fires are on the rise,
Zakat funds aid the needy, orphans, widows, plant and animal species are migrating, and
and disabled individuals, providing water bodies and wells are depleting due to
sustenance and rehabilitation. The federal increased human activities. Additionally, the
government manages Zakat collection and rise in sea level and increased storm intensity
distribution, as per the approved formula by can lead to coastal inundation and erosion
the Council of Common Interests (CCI) and the loss of critical coastal habitats such
across provinces and federal territories. In as mangroves, which serve as important
FY 2024, a total of Rs 7.39 billion was nurseries for many fish species. The Sixth
distributed. Assessment Report of the Intergovernmental
Panel on Climate Change (IPCC) indicates
During July-March FY 2024, expenditures
that climate change is likely to exacerbate
amounting to Rs 1.37 billion were incurred
the frequency and intensity of such extreme
on 12,303 scholarship cases under the
events.
Workers Welfare Fund. Additionally, Rs
660.14 million was given out as marriage The government has devised a strategy to
grants, with each worker receiving a address the challenges posed by climate
payment of Rs 400,000 benefiting the change, incorporating policy interventions
families of 4,107 workers. Furthermore, the and climate-related measures such as the
WWF has paid out a death grant of Rs 575.5 National Clean Air Policy (NCAP),
million at Rs 800,000 for each worker, Nationally Determined Contributions
covering 1,060 incidents of accidents (NDCs), Pakistan Policy Guideline for
nationwide. During July-March FY 2024, an Trading in Carbon Markets, National
amount of Rs 42.53 billion has been Adaptation Plan (NAP), and Climate Budget
disbursed by EOBI on various pension Tagging Initiative, among others. The 2023

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Pakistan Economic Survey 2023-24

United Nations Climate Change Conference reducing and minimizing the carbon
convened from November 30th to December footprint and achieving sustainable climate
13th, 2023, in Dubai, United Arab Emirates resilience, as well as sustainable
(UAE). Pakistan actively engaged as a socioeconomic growth in line with NDCs.
responsible member of the global Different projects/programmes being
community, dedicated to upholding the undertaken through these funds include the
principles outlined in the UN Framework on Community Resilience Partnership
Climate Change (UNFCCC). Pakistan Program, Distribution of Solar Products,
played a significant role in the COP 28 Transforming the Indus Basin, Recharge
process and achieved several milestones. Pakistan, and Scaling up of Glacial Lake
Outburst Flood (GLOF) Risk Reduction in
The Ministry of Climate Change and Northern Pakistan, among others. To
Environmental Coordination, being the enhance forest area, The Green Pakistan-
National Designated Authority (NDA) and Upscaling Program, Phase-I, has achieved a
the Focal point for international climate plantation target of 2.12 billion, and the
funds, serves as an interface between the programme is undergoing revision for the
Government of Pakistan and these funds, next four years (2024-2028), expanding its
namely Global Environment Facility (GEF) scope to include carbon finance
and Green Climate Fund (GCF). The mechanisms, scientific resource
Ministry is working with these Funds and assessments, livelihood creation, and
convening regular steering committee biodiversity conservation.
meetings to facilitate projects aimed at

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