Lahore: The GDP growth of Pakistan has been recorded at a modest 1.68% for the fiscal year 2023-2024, continuing a trend of subdued economic performance, primarily due to weak sectoral growth in large scale manufacturing and agriculture. This rate is significantly lower compared to various other estimates, including those from the Government of Pakistan and international financial institutions.

According to Lahore School of Economics, the country’s economic performance this fiscal year follows a “very weak” growth pattern, with large scale manufacturing barely improving from a contraction in the previous fiscal year, and agricultural recovery remaining below expected trends. This analysis aligns with a broader evaluation of economic challenges, such as persistent external imbalances that constrain GDP growth through import restrictions and necessitate periodic IMF bailouts.

For the upcoming fiscal year 2024-25, the Lahore School of Economics projects an improvement in GDP growth to 3.3%. This projection is based on the hypothesis that the cycle of low and high growth phases, related to the buildup and depletion of reserves, will continue to influence the economic trajectory. The report underscores that while high GDP growth rates above 5% per annum exacerbate current account deficits, lower growth rates help maintain them at sustainable levels, suggesting a cyclical pattern tied to external financial support and reserve levels.