The IMF Staff-Level Agreement (SLA) for $7 billion programme is done. However, that does not ensure revival of the economic growth which is necessary for the young population. The government expects 3.5 percent GDP growth in FY25, but it would be a surprise if the toll surpassed 3 percent.

FY25 started at a weak momentum in the manufacturing and services sector which is positive for growth numbers in a way as it is likely to jump from a very low base. For example, Large Scale Manufacturing (LSM) was down by 10 percent in FY23 and remained flat in FY24; and a slight bounce back will bring it back to green. Similar is the story of wholesale and retail trade in services.

However, the outlook on agriculture is ominous. FY25 is starting on a high base (last year’s growth was 6.25 percent which is substantially higher than the previous five years average growth of 3 percent. The farm economics does not look good this year. One, the low (or absence of) wheat support price has adversely impacted the returns on investment for farmers. Second, the harsh summers may have a dent on the cotton crop in Sindh, and the risk of erratic monsoon may impact the output in Punjab negatively.

Then the rice bonanza of last year (due to absence of India in the exporting market) is going to be........

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