Assessment of performance: Year 2025 characterised by improving economic stability: LCCI

LAHORE: President of the Lahore Chamber of Commerce and Industry Faheem-ur-Rehman Saigol has provided a comprehensive assessment of Pakistan’s economic performance in 2025, describing it as a year characterized by improving economic stability alongside persistent structural challenges that demand sustained policy intervention.

In his overall evaluation, Saigol acknowledged that the year demonstrated significant progress across multiple economic indicators, including robust remittance inflows, declining inflation rates, exceptional stock market performance, strengthened foreign exchange reserves, and substantial reductions in interest rates that have collectively bolstered business confidence across the country. Nevertheless, he emphasized that these positive developments must be viewed within the context of ongoing structural impediments, including a widening trade deficit, elevated energy costs, sluggish investment growth, and a constrained tax base, all of which necessitate focused and deliberate policy attention. Despite these challenges, the overall economic outlook remains cautiously optimistic.

According to Saigol, remittance inflows registered a remarkable surge during the fiscal year 2024-25, reaching approximately USD 38.3 billion compared to USD 30.3 billion in the preceding fiscal year 2023-24. This substantial increase of approximately 26 percent signals renewed confidence among overseas Pakistanis and represents a critical source of foreign exchange for the country. The momentum has continued into the current financial year, with remittances during the first five months spanning July to November 2025-26 standing at around USD 16.1 billion, up from approximately USD 14.8 billion during the same period in the previous year, reflecting sustained growth of more than 9 percent.

The LCCI President highlighted the dramatic decline in inflation as one of the most significant achievements of the year, noting that average inflation for the fiscal year 2024-25 fell sharply to 4.5 percent compared to approximately 23.4 percent recorded in the fiscal year 2023-24. This substantial reduction has provided considerable relief to both consumers and businesses, easing the pressure on household budgets and operational costs that had become increasingly burdensome during the previous high-inflation environment.

Saigol also drew attention to the exceptional performance of the stock market, which he described as a clear indicator of improved investor confidence in the Pakistani economy. The KSE-100 Index surpassed 170,000 points during the year, compared to approximately 105,000 points in the previous year, representing a remarkable increase of over 60 percent. This surge reflects growing optimism among investors regarding the country’s economic trajectory and the potential for sustained growth in the coming years.

Foreign exchange reserves have strengthened significantly throughout 2025, according to Saigol, with reserves crossing the 21 billion US dollar mark compared to 15.9 billion US dollars recorded in December of the previous year. This increase of around 32 percent represents a substantial improvement in external sector stability and provides the country with greater capacity to manage its international obligations and buffer against external shocks.

In terms of monetary policy, Saigol noted that interest rates were reduced substantially during the year, with the policy rate declining from 22 percent to approximately 10.5 percent, marking a reduction of more than 11 percentage points. This significant easing of monetary conditions has provided much-needed relief to businesses through lower borrowing costs, facilitating access to credit and supporting investment and expansion activities across various sectors of the economy.

The information technology sector emerged as a bright spot in Pakistan’s export portfolio, according to the LCCI President, with IT exports recording strong growth of 19 percent during the first five months of the current financial year. Pakistan’s digital economy achieved a major breakthrough as IT exports reached 1.8 billion US dollars during the July to November period, reflecting rising global demand for Pakistani technology services and the increasing competitiveness of the country’s tech workforce in international markets.

Copyright Business Recorder, 2025