KARACHI: Trade and industry representatives seem to disagree about the nation’s economic results for 2024. While some think that trading activity remained weak, others point out that one of the key aspects of the previous year was that “Pakistan has managed to escape a possible default.”
Restoring political stability was a noteworthy accomplishment of the current government in 2024, despite the contentious mandate. Ehsan Malik, the CEO of the Pakistan Business Council (PBC), noted that while commodity tailwinds offered some respite to the public, the government was protected from debt fragility by securing the IMF’s cover.
Following the budget, the formal sector’s tax burden rose while its borrowing costs decreased. He noted that falling import demand and growing remittances have a significant positive impact on the current account.
However, as the index stocks do not represent a sizable portion of the GDP or a wide range of economic sectors, Mr. Malik stated that the increase in the KSE-100 index is not a reliable predictor of the state of the economy.
There are five major things to keep an eye on in 2025. First off, Pakistan’s economy has experienced relative stability in the first year of a new IMF program four times before, only to have it reversed as fiscal and monetary easing sparked import-based demand and balance of payments crises.
It would be wise to restrain those in government and business who are eager for quick expansion.
He went on to say that postponing significant reforms is the second threat. The administration must not only win over all of its coalition partners, but also put an end to internal strife and demonstrate unified leadership on matters such as government right-sizing and privatization.
The third warning sign is the inability to reach tax revenue goals, which puts further strain on current taxpayers, notably those in the salaried class.
The most challenging aspect of FBR’s transformation plan is dealing with people and their attitudes toward taxpayers, out of the three categories of process, technology, and people.
The cost, availability, and dependability of electricity are the fifth main issue, according to Ehsan Malik, CEO of the Pakistan Business Council.
Without these, the job market would remain weak and manufacturing will remain uncompetitive.
The PBC head discussed some of the advantages for 2025, pointing out that many industries have significant underutilized capacity that could be used without further capital expenditure and create jobs.
“The nation’s exports need improved market access, but it needs to renegotiate the current trade agreements to get better terms rather than pursuing new ones.”
“Fortunately, Pakistan did not default in 2024, putting an end to a depressed environment,” stated Anjuman-i-Tajiran, the head of the All Pakistan.
A decline in trading activity
Other achievements, according to Naeem Mir, included a current account surplus, a sharp increase in foreign remittances, a cap on imports below $60 billion, single-digit inflation, rupee stability, improved foreign exchange reserves, the completion of an IMF program, a record stock market boom, and a reduction in interest rates from 22% to 13%.
According to the general secretary of the All City Tajir Ittehad (ACIT), the industrial sector failed to make considerable development, unemployment reached 25–30% due to muted sales, and commercial and industrial operations remained 50 percent below their potential in 2024.
Mohammad Ahmed Shamsi denied the government’s assertions that food inflation has decreased, arguing that the actual situation contradicts the lauded drop in living expenses.
“The construction and related industries are fighting for their lives,” Mr. Shamsi stated, and he urged the government to develop pro-business and pro-trade measures in the upcoming year to win back the confidence of investors.
Due to rising electricity bills, rising food prices, high taxes, and political unpredictability, the real estate industry saw an 80 percent decline in the previous year, followed by the industrial sector at 70 percent and the retail sector at 60 percent, according to the chairman of Markazi Anjuman Tajiran Pakistan.
By addressing the political impasse, enhancing peace and order, and lowering the tax burden on both enterprises and consumers, Kashif Chaudhry encouraged the government to take action to improve the business environment.
2024 was not a good year for business, according to Atiq Mir, head of the All Karachi Tajir Ittehad (AKTI), because political unrest had eroded investor trust and caused cash to flee.
Additionally, Mr. Mir had low hopes for the upcoming year. “Because of the government’s poor planning, poor choices, political impasse, and, last but not least, the IMF’s directive, I do not anticipate any economic recovery in 2025.”
