Outlook: Continued cautious optimism

The year ahead holds cautious optimism for Pakistan’s economy, contingent on the absence of major internal or external shocks. The recovery remains fragile, with citizens and businesses stretched to their limits. Any policy missteps or an escalation in global conflicts affecting commodity prices, oil markets, or trade routes could swiftly erode the hard-earned gains of 2024. Major global development partners have upgraded Pakistan’s GDP growth forecasts, with the International Monetary Fund (IMF) raising its projection to 3.2 per cent from 2.4pc and the Asian Development Bank to 3pc growth in 2025. Both institutions attribute the improved outlook to enhanced macroeconomic stability following Pakistan’s entry into the IMF programme. Industrial activity is expected to gain momentum, but a robust recovery depends on the government’s commitment and ability to steer the economy towards inclusive growth and reorient towards manufacturing from trade. This requires fostering an environment where entrepreneurs are confident in making long-term investments and are equipped to compete locally and globally on the strength of productivity and innovation, without relying on sovereign profit guarantees.