Pakistan Economic Outlook
An economy struggling with structural weaknesses:
Pakistan’s economy has faced recurring crises, including high inflation, a weak currency, and a persistent balance of payments deficit. While the country has strong agricultural and textile sectors, economic instability, political uncertainty, and security concerns have hampered long-term investment and growth.
Dependence on external financing and IMF bailouts:Pakistan has repeatedly turned to the International Monetary Fund (IMF) for financial assistance due to chronic fiscal deficits and low foreign exchange reserves. The country’s high external debt burden has constrained government spending on development and social programs. The frequent cycles of IMF programs have provided short-term relief but have not addressed deeper structural weaknesses.
Energy shortages and inflationary pressures:Pakistan faces chronic energy shortages, which disrupt industrial output and economic activity. Additionally, inflation has surged due to a combination of supply chain disruptions, currency depreciation, and fiscal mismanagement. Food and fuel prices remain particularly volatile, impacting household purchasing power and business costs.
Pakistan’s economic outlook:Economic conditions in Pakistan will remain challenging, with high debt obligations, inflation, and political instability posing significant risks. Structural reforms, including improvements in tax collection, investment in energy infrastructure, and enhancing the business climate, are necessary for sustainable long-term growth. Without deeper reforms, Pakistan is likely to remain vulnerable to economic crises and external shocks.
Pakistan's Macroeconomic Analysis:
Nominal GDP of USD 373 billion in 2024.
Nominal GDP of USD 373 billion in 2024.
Nominal GDP of USD 371 billion in 2024.
GDP per capita of USD 1,574 compared to the global average of USD 10,589.
GDP per capita of USD 1,581 compared to the global average of USD 10,589.
GDP per capita of USD 1,581 compared to the global average of USD 10,589.
Average real GDP growth of 3.5% over the last decade.
Average real GDP growth of 3.5% over the last decade.
Average real GDP growth of 3.4% over the last decade.
Sector Analysis
In 2022, services accounted for 50.6% of overall GDP, manufacturing 13.6%, other industrial activity 12.4%, and agriculture 23.4%. Looking at GDP by expenditure, private consumption accounted for 83.4% of GDP in 2023, government consumption 10.2%, fixed investment 13.7%, and net exports -7.3%.International trade
In 2023, manufactured products made up 71.0% of total merchandise exports, mineral fuels 0.6%, food 21.9%, ores and metals 4.5% and agricultural raw materials 2.0%, with other categories accounting for 0.0% of the total. In the same period, manufactured products made up 41.7% of total merchandise imports, mineral fuels 33.5%, food 16.1%, ores and metals 3.7% and agricultural raw materials 5.0%, with other goods accounting for 0.0% of the total. Total exports were worth USD 31 billion in 2024, while total imports were USD 53.20 billion.Main Economic Indicators
Economic growthThe economy recorded average annual growth of 3.5% in the decade to 2024. To read more about GDP growth in Pakistan, go to our dedicated page.
Fiscal policy
Pakistan's fiscal deficit averaged 0.2% of GDP in the decade to 2024. Find out more on our dedicated page.
Unemployment
The unemployment rate averaged 6.1% in the decade to 2021. For more information on Pakistan's unemployment click here.
Inflation
Inflation averaged 10.5% in the decade to 2024. Go to our Pakistan inflation page for extra insight.
Monetary Policy
Pakistan's monetary policy rate ended 2024 at 13.00%, up from 10.00% a decade earlier. See our Pakistan monetary policy page for additional details.
Exchange Rate
From end-2014 to end-2024 the rupee weakened by 63.9% vs the U.S. dollar. For more info on the rupee, click here.
Economic situation in Pakistan
Over the past month, the government released its projections for GDP growth in fiscal year (FY) 2025 (July 2024–June 2025). It expects the economy to have expanded 2.7%, bang in line with our Consensus and down from its prior estimate of 3.6%. This would be the strongest GDP growth in three years, but still means the economy would be about 10% smaller than if it had consistently risen at its pre-Covid trend of 3.8%. As such, GDP continues to recover from the FY 2022–2023 balance of payments crisis—but at a slow pace. According to the government, the industrial and services sectors should have gained pace in FY 2025, aided by lower inflation and interest rates. In other news, India suspended a water-sharing deal with Pakistan in April after the two countries’ militaries briefly clashed over the disputed Kashmir region. This poses a risk to agricultural output and hydropower generation.Pakistan Economic Forecasts
Projections out to 2035.47 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 17 expert analysts.
Want to get insight on the economic outlook for Pakistan in the coming years? FocusEconomics collects projections out to 2035 on 47 economic indicators for Pakistan from a panel of 17 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the Pakistan economy. To download a sample report on the Pakistan's economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.