Finance ministry forecasts mild inflation uptick

#Finance #ministry #forecasts #mild #inflation #uptick

ISLAMABAD: The Finance Ministry has predicted that consumer price index (CPI) inflation will be slightly between 3.0 to 4.0 percent and 4.0 percent in June 2025, which will indicate a gradual change after a record low inflation level in recent months.

In a monthly economic approach released on Thursday, the ministry said that before the last month of the financial year, inflation is expected to be between 1.5 percent and 2.0 percent in May.

The report also noted that the financial policy committee (MPC), responding to a permanent decline in inflation, had reduced the policy rate from 100 % to 11 % on May 5, 2025. The same period last year increased by 7.0 %, between July 1 and May 2, May 2, a large amount (M2) increased by 4.7 %.

Pure foreign assets increased to Rs 1,210.5 billion, which was Rs 590 billion, while pure domestic assets increased by Rs 476.2 billion, which is less than Rs 1,588.3 billion last year. The private sector’s credit is more than three times higher than Rs 239.9 billion recorded during the same period last year.

The KSE -100 index closed at 111,327 points in April, which fell 6,480 points during the month during the geographical political tension with India. However, the market has since been regained in May. Market capitalization declined by Rs 855 billion, which ended at Rs 13,521 billion in April.

The vision for large -scale manufacturing (LSM) is suppressed, suggesting slow recovery due to the year -on -year contraction and a decrease in the month in recent months. However, high-frequency indicators improve-such as increasing automobile outputs, increasing imports of raw materials, and more appropriate financial stand-signal cautious hope. Favorable weather and better availability of water is also expected to support strong crop production, which is aided by overall economic growth.

The ministry said that Pakistan’s economy has been upgraded through a Fitch rating, citing better financial management, current account surplus and economic stability that ease inflation.

Raise costs increased, reducing fiscal deficit and strengthening basic surplus. The current account has published an additional $ 1.9 billion, which is due to a strong growth in exports and remittances. Inflation refused the historic rooms, which created the scope for financial relaxation. Although LSM activity was weak, automotive and export -based sectors recorded promising benefits.

Climate finance measures – including the flexible and sustainable convenience of the IMF and the issuance of Pakistan’s first Green Sukk.

In April 2025, the headline inflation fell 0.3 percent year, down 0.7 percent in March and April 2024 to 17.3 percent. Monthly, CPI declined 0.8 %. Large assistants of the year include health (14.1 %), education (10.9 %), and clothing and shoes (9.1 %), while devastating food items (-26.7 %), transportation (-3.9 %), housing and utility (-2.6 %), and non-prolific food (-0.8 %). The sensitive price indicators have declined by 0.29 % for the week ending May 22, 2025, which has dropped. During the fiscal year of July 2025, the same period last year compared to Rs 9.78 trillion, the total revenue increased by 36.7 percent to $ 13.37 trillion. It was widely raised by a 68 % increase in non -tax revenue, which reached Rs 4.23 trillion in fuel through central bank profits, petroleum levies, profit and surcharges. The Federal Board of Revenue deposited Rs 9.3 trillion in tax revenue from July to April, which is 26.3 % higher from the year. The costs increased by 19.4 % to Rs 16.34 trillion, the current costs increased by 18.3 % and development costs increased by 32.6 %. As a result, the fiscal deficit decreased by 2.6 percent of GDP, which is less than 3.7 percent, while the basic surplus increased from Rs 1.62 trillion (1.5 percent) last year to Rs 3.47 trillion (3.0 percent of GDP).

The ministry concluded that these results reflect the impact of better financial discipline and ongoing stability efforts, which aims to support economic stability.