ISLAMABAD: Pakistan’s headline inflation is projected to remain within the 5.8-6.8% range in November and could further decline to 5.6-6.5% by December, according to the Finance Division’s latest economic report released on Wednesday.
The ‘Monthly Economic Update and Outlook’ suggests that fiscal consolidation efforts, coupled with controlled inflation, will provide a boost to economic activities in the coming months. After reaching a record high of 38% in May of 2023, inflation has been on a downward trend with October 2024 inflation standing at 7.2%, slightly higher than the 6.9% recorded in September.
The report noted that inflation is expected to ease further in November and December, signalling potential for a future rate cut.
The finance division’s report pointed to positive trends in both agriculture and industry as factors contributing to the economic recovery. On agriculture, it stated that wheat sowing is underway to meet production targets, with the government ensuring timely provision of inputs to farmers at reasonable prices.
In the industrial sector, large-scale manufacturing (LSM) continues to show signs of resilience. Although year-on-year growth remains negative, month-on-month performance is improving, particularly in key sectors such as textiles and automobiles.
The government remains optimistic that continued policy support and external stability will foster further recovery with a cautiously positive outlook for the economy in the near future.
On the external front, the report highlighted that Pakistan’s current account shifted into surplus during the first four months of FY2025, which strengthens the sustainability of the external sector.
The ministry anticipates that exports, imports, and remittances will continue their upward trajectory. Export values are expected to remain within the range of $2.5-3.0 billion in November, while imports will be between $4.5-4.9 billion. Worker’s remittances are forecasted to range from $2.8-3.3 billion.
The finance ministry expressed confidence that ongoing fiscal policies, along with a stabilising external sector, will provide a foundation for sustained improvement in Pakistan’s economy. –Agencies
