Pakistan Achieves Historic Economic Milestone as Nominal GDP Exceeds $400 Billion

Pakistan’s economy has crossed a historic threshold, with its nominal GDP expanding to reach $411 billion (approximately Rs114.7 trillion) during fiscal year 2025—marking the first time the South Asian nation has surpassed the $400 billion mark. According to official data from the National Accounts Committee, this achievement represents a watershed moment for the country’s economic development trajectory.

However, the growth narrative reveals a more complex picture. While nominal GDP expanded by a robust 2.68% year-over-year, this fell short of the government’s more ambitious 3.6% expansion target. Despite this shortfall, economists have characterized the performance as a meaningful recovery phase. Notably, Pakistan’s nominal GDP has demonstrated impressive resilience, expanding at a 9.3% compound annual growth rate over the preceding five-year period—a testament to structural improvements in the economy’s foundation.

Sector Performance Tells a Mixed Story

The economy’s expansion was uneven when examined through a sectoral lens. The agricultural sector posted modest gains with a 1.18% increase, reflecting the complexities of monsoon-dependent crop cycles and climate variability. In contrast, industrial output contracted by 1.14%, signaling ongoing challenges within manufacturing and production segments amid global economic headwinds.

Monetary Policy Adjusts to Changing Conditions

The State Bank of Pakistan responded to the improved inflation environment by reducing its benchmark policy rate to 11%, providing some relief to borrowers and potentially stimulating investment activity across the economy. This adjustment reflects confidence in the trajectory of price stability.

Long-Term Ambitions Shape Policy Framework

Looking ahead, Pakistan has established an ambitious economic target: achieving $1 trillion in nominal GDP by fiscal year 2035. Policymakers anticipate this milestone will be driven by sustained structural reforms and macroeconomic stability initiatives, positioning the nation for accelerated development in the coming decade.