Pakistan’s Economic Crisis in 2024-25
Economic Crisis of Pakistan
Pakistan’s economy in 2024-25 is going through a difficult time. People are facing rising prices, job losses, and uncertainty about the future. Although the government is trying to fix the situation, progress is slow. Let’s explore the current economic conditions, key issues, and what lies ahead.
Slow Growth and Low Confidence
Pakistan’s economy is expected to grow by just 2.5% to 3% this year. This growth is not enough to meet the needs of a growing population. One reason for this slow growth is the poor performance of the industry and services sectors. In contrast, agriculture has shown some improvement. Thanks to better weather and government support, farmers have produced more wheat and rice. However, this alone cannot boost the economy. As a result, both businesses and citizens remain uncertain. Investment has decreased, and people are spending less due to rising costs.
Rising Inflation and Cost of Living
Inflation is a major challenge. Prices of everyday items such as food, fuel, and electricity have gone up sharply. In 2024-25, inflation is expected to stay between 20% and 25%. This has hurt low-income families the most. For example, a normal grocery trip now costs much more than it did a year ago. Moreover, electricity and gas bills are draining household incomes. Even though the government has raised interest rates to control inflation, it hasn’t helped much yet.
Currency Weakness and Low Reserves
The Pakistani Rupee (PKR) continues to lose value. It now trades at around PKR 280–300 per USD. This has made imported goods even more expensive, further pushing prices up. In addition, the country’s foreign reserves are very low, about USD 8–10 billion. That’s only enough to pay for 1.5 months of imports. Pakistan is still depending on loans from the International Monetary Fund (IMF) and friendly nations to stay afloat.
Debt and Fiscal Deficit Pressure
Another serious issue is the government’s fiscal deficit, which is the gap between what the government earns and what it spends. In 2024-25, this gap is expected to be 6.5% to 7% of GDP. A lot of the budget goes toward paying interest on loans, defense spending, and fuel subsidies. There is not much left for health, education, or job creation. On top of that, public debt is now over 75% of GDP, which makes the situation even more worrying.
Unemployment and Growing Poverty
Due to weak economic growth, unemployment is rising, especially among young people. Many fresh graduates are struggling to find jobs. Additionally, those who are working often earn very little or work in informal sectors without job security. At the same time, poverty levels have increased. Around 35% to 40% of the population now lives below the poverty line. People in rural areas are especially affected by food shortages and lack of basic services.
Reforms and the Way Forward
Despite these problems, there is hope. The government is working on economic reforms, with help from the IMF. These include better tax collection, support for small businesses, and plans to boost exports. Moreover, programs such as Special Economic Zones (SEZs) aim to attract investment and create jobs. However, real change will take time. For now, people need support to manage daily struggles.
Conclusion: A Critical Time for Pakistan
In summary, Pakistan’s economy in 2024-25 is at a critical point. The challenges are real, high inflation, low growth, debt, and poverty. Yet, with strong leadership, policy reforms, and support for the people, the country can move toward stability. What happens next will depend on how well the government manages the crisis and supports its citizens. The road ahead is tough, but not impossible.