Karachi: In a year characterized by significant economic shifts and fiscal reforms, Pakistan's economy has shown a modest yet promising recovery, according to the recently released financial statements of the ABL Money Market Fund for the fiscal year ending June 30, 2025. The Board of Directors of ABL Asset Management Company Limited presented these audited reports, highlighting the country's macroeconomic trajectory amid a backdrop of global uncertainties.
The fiscal year 2025 marked a pivotal moment for Pakistan, underscored by policy stability, the successful conclusion of an IMF Standby Arrangement, and continuous structural reforms. Provisional data indicates a 2.68% growth in real GDP for FY25, a slight improvement from the 2.51% recorded in FY24. This growth reflects a broad-based recovery across various sectors, with the industrial sector experiencing a robust rebound of 4.77%, up from a 1.37% contraction the previous year. The services sector also showed positive momentum, expanding by 2.91% compared to 2.19% in FY24.
On the inflation front, the Consumer Price Index (CPI) averaged 4.61% in FY25, a significant decline from 23.9% in FY24, driven by improved food supply, declining global energy prices, and policy measures. The central bank's decision to lower the policy rate from 20.5% to 11.0% by the fiscal year-end further reflects confidence in the country's macroeconomic stabilization efforts.
According to information available from the Pakistan Stock Exchange (PSX), the mutual fund industry witnessed substantial growth, with assets under management rising by 44.02% year-on-year, from PKR 2,677 billion to PKR 3,859 billion. Notably, money market funds saw a 43.67% increase, reaching PKR 1,904 billion, while equity market funds surged by 98.98%, attributed to positive investor sentiment and a favorable capital markets outlook.
The external account performance was notably strong, with a current account surplus of USD 2.1 billion, contrasting with the USD 2.07 billion deficit of the previous year. This improvement was largely supported by robust remittance inflows, which rose to USD 38.3 billion, and a stable Pakistani Rupee. Foreign exchange reserves increased from USD 13.99 billion in June 2024 to USD 19.27 billion by June 2025, bolstered by multilateral inflows, including the final tranche of the IMF SBA.
On the fiscal side, the Federal Board of Revenue reported provisional collections of PKR 11.72 trillion, reflecting continued momentum in tax reforms and economic formalization. The FY26 Federal Budget emphasized revenue expansion and expenditure discipline, aligning with IMF benchmarks.
Despite intermittent global volatility and geopolitical tensions, Pakistan's economic environment has stabilized, with inflation easing and the external account strengthening. The monetary easing and improved macroeconomic indicators have created a favorable backdrop for fixed income investors, setting the stage for further easing in FY26.
As Pakistan looks ahead, sustained reform implementation and global financial support will be crucial in maintaining this economic stabilization and unlocking further growth opportunities. The foundation laid in FY25 provides a supportive platform for medium-term growth, contingent on continued global and domestic policy support.