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Pakistan inflation likely to range between 3-4% in June

Finance Ministry’s Economic Outlook cites improved investor confidence, stronger LSM outlook, and robust agriculture inputs as signs of economic stabilization

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Business Desk

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Pakistan inflation likely to range between 3-4% in June
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Pakistan's inflation is expected to remain within the range of 3.0% to 4.0% in June, while robust exports and remittance inflows are projected to maintain a current account surplus during the ongoing fiscal year, according to the Ministry of Finance’s Monthly Economic Outlook released Monday.

The report noted a positive outlook for Large Scale Manufacturing (LSM) in the coming months, supported by favorable trends in high-frequency indicators such as cement dispatches and automobile sales. Rising loans to private sector businesses also suggest improved investor confidence and increased production activity.

On the fiscal side, the deficit decreased to 3.2% of GDP during July-April FY25, compared to 4.5% during the same period last year. The primary surplus also improved significantly, reaching PKR 3,648.9 billion, or 3.2% of GDP, up from PKR 1,611.5 billion, or 1.5% of GDP, a year earlier. With ongoing fiscal reforms, the deficit is expected to remain well below last year’s level.

LSM recorded mixed results in April , growing 2.3% year-on-year but contracting 3.2% month-on-month. Cumulatively, LSM declined by 1.5% during July-April FY25, compared to a slight growth of 0.3% in the same period last year.

Nonetheless, 12 of 22 sectors posted positive growth, including textiles, wearing apparel, coke and petroleum products, beverages, and pharmaceuticals. The auto sector showed strong gains during July-May FY25, with production of cars rising 39.2%, trucks and buses 94.8%, and jeeps and pickups 74.7%.

Cement dispatches stood at 42.8 million tonnes in July-May FY25, up 2.5% year-on-year. While domestic sales dipped by 1.9% to 35.1 million tonnes, exports surged 25.7% to 8.3 million tonnes.

In agriculture, the government has set targets of 2.2 million hectares for cotton cultivation and 10.18 million bales for production for the 2025-26 Kharif season. Farm input utilization continued to rise, aided by improved access to quality seeds, credit, machinery, and fertilizers.

Agricultural credit disbursement during July-April FY25 reached PKR 2,066.6 billion — 15.7% higher than the previous year — moving toward the annual target of PKR 2,572.3 billion.

Imports of agricultural machinery increased by 10.0%, totaling $69.2 million during the same period, indicating growing mechanization.

For the Kharif season, estimated availability of urea and DAP stands at 4,012 thousand tonnes and 840 thousand tonnes, respectively. In April alone, urea and DAP off-take reached 418 and 95 thousand tonnes, registering year-on-year increases of 4.6% and 135.2%, respectively.

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