Inflation to lower in March as inflationary pressures ease: report

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Islamabad: Inflation is expected in Pakistan in April 2025, even in the midst of low growth, the economy is stable. The Ministry of Finance, in its latest monthly report, did not participate in the GDP growth estimates, but it is predicted that consumer price index (CPI) inflation will increase slightly in the coming month.

Inflation is likely to remain within the limits of 1-1.5 % for March 2025 and increase to 2-3 % in April 2025. CPI inflation is 1.5 percent year -on -year in February 2025, less than 2.4 percent in the previous month and less than 23.1 percent in February 2024.

The finance ministry blamed the reduction of inflation, the reason for the drop in food and energy prices. However, inflation is due to increasing costs in key sectors, including health (14.3 %), clothing and shoes (13.8 %) and education (10.9 %). Meanwhile, destructive food items decreased by 20.3 %, as well as in defective foods (1.5 %), transportation (1.1 %), and housing, water, electricity, gas and fuel (0.6 %) decreased by 20.3 %.

On the external front, exports, imports and workers’ remittances are expected to maintain the above trend. Climate factors related to Ramadan and Eid are likely to increase remittances in the coming months. The economic expansion is expected to support the increase in exports and imports, which will help keep the current account within the boundaries.

Despite the challenges, the economy shows signs of flexibility, especially in financial and external stability. Financial stability measures have resulted in a basic surplus and a narrow financial loss. The fiscal deficit was 1.7 % of GDP in July-January 2015, which was less than 2.6 percent in the same period last year. A year ago, the basic surplus increased from Rs 1,938.8 billion (1.8 % of GDP) a year ago to Rs 3,518.7 billion (2.8 % of GDP). Pure federal revenue increased by 45.3 % to Rs 6,362.5 billion in the first seven months of fiscal year 2025.

The industrial sector is unstable, which shows massive manufacturing (LSM) mixed trends. In January 2025, the LSM increased by 2.1 % in the month, which reflects light recovery from December 2024. However, on a year -long basis, the LSM contracted a 1.2 %, which changed the growth of 1.1 % visible last year. During July-January 2025, LSM declined 1.8 percent, while last year compared to 0.6 percent contraction. Sector trends within the LSM performed a mixed performance, with 11 of the 22 sectors posted positive growth. The remarkable increase was recorded in textile (2.1 %), costumes (10.4 %), coke and petroleum products (2.5 %), pharmaceuticals (2.0 %), and automobiles (45.7 %). The automobile sector performed specially, car output increased by 41.9 %, trucks and buses increased by 105 %, and jeep and pickup increased by 78.2 %. However, tractor production has decreased by 30 %.

It is expected that economic stability in the agricultural sector will also help. Wheat production has been targeted at 27.9 million tonnes for the Rabi 2024-25 season, supported by government measures, including input subsidy, high production seed distribution and interest-free loans under the Kasan Card Scheme. In July-January 2015, agricultural credit supply increased by 16 %, which reached Rs 1,483.6 billion, while imports of agricultural machinery increased by 45.7 percent to $ 77.2 million during July 2015.