Pakistan’s Ministry of Finance has released its monthly economic outlook report, claiming a significant improvement across various economic indicators. The report highlights that inflation has reached its lowest level in 3.5 years.
Key improvements cited in the report include substantial increases in remittances, exports, and foreign investment. The report states that the national economy demonstrated stable recovery during the first quarter. Specifically, the report notes that inflation in September fell to 6.9 percent, its lowest point in 44 months. The report attributes this positive trend to several factors: the receipt of a $1.03 billion tranche from the IMF, a boost in business and market confidence following the SCO conference, and ongoing efforts towards sustainable economic recovery.
Remittances increased by 38.8 percent, reaching $8.78 billion. This significant rise in funds sent home by overseas Pakistanis has provided a crucial boost to the national economy.
Exports also saw a positive trend, increasing by 7.8 percent and reaching $7.49 billion. This growth indicates increased international demand for Pakistani goods and services.
Foreign investment experienced a substantial surge, increasing by 70.4 percent, exceeding $900 million. Foreign Direct Investment (FDI) specifically saw a 48 percent increase, reaching $770 million, demonstrating growing confidence in Pakistan’s investment climate.
The State Bank of Pakistan (SBP) foreign exchange reserves also saw a significant increase, rising from $7.61 billion to over $11 billion. This bolstering of reserves strengthens Pakistan’s economic stability and resilience.
The stock market showed remarkable growth, exhibiting a 78.4 percent increase and surpassing 90,000 points. This signifies investor optimism and confidence in the country’s economic future.
The exchange rate also saw positive movement, with the dollar rate decreasing from Rs280.29 to Rs277.62 in one year. This slight but positive shift indicates improved currency stability.
Tax Revenue from July to September increased by 25.5 percent, reaching Rs2563 billion . This indicates improved tax collection efficiency and compliance.
Non-Tax Revenue also experienced growth, increasing by 20.8 percent to Rs341 billion. This further contributes to the overall improvement in government revenue.
While the report highlights positive trends, it also acknowledges a 4.3 percent increase in the fiscal deficit during the first two months of the fiscal year, exceeding Rs841 billion. However, it also highlights a significant 92 percent decrease in the current account deficit, reducing it to $98 million. This reduction in the current account deficit is a significant positive development.
