Pakistan Breaks Through $400B GDP Barrier, Eyes Trillion-Dollar Economy

Pakistan’s nominal GDP has officially surpassed the $400 billion threshold, clocking in at $411 billion (Rs114.7 trillion) in FY25 according to the National Accounts Committee. This breakthrough marks the first time the South Asian nation’s economy has crossed this benchmark, underscoring a gradual economic stabilization after years of fiscal pressures.

Growth Performance Lags Behind Target

The economy expanded by 2.68% in the fiscal year, falling short of the projected 3.6% growth target. However, analysts point to the broader context of recovery—nominal GDP has demonstrated a robust 9.3% compound annual growth rate over the previous five years, signaling underlying economic resilience. Topline Securities CEO Sohail Mohammed characterized the performance as “a notable recovery,” emphasizing the importance of maintaining this trajectory.

Divergent Sectoral Trends

Economic growth has not been evenly distributed across industries. The agricultural sector posted modest gains of 1.18%, while the industrial sector contracted by 1.14%. This divergence reflects ongoing structural challenges and uneven demand recovery across different economic segments.

Monetary Policy Support

The State Bank of Pakistan moved to support economic momentum by reducing the policy rate to 11%, citing an improved inflation outlook. This rate cut signals growing confidence in price stability and aims to ease borrowing costs for businesses and consumers.

Ambitious Long-Term Vision

Pakistan has set its sights on achieving a $1 trillion GDP by FY2035, a tenfold increase from current levels. This ambitious target hinges on sustained structural reforms, macroeconomic stability, and continued private sector investment. Success would require maintaining momentum across multiple economic fronts while navigating global headwinds.