Pakistan’s headline inflation is expected to remain within the range of 5.8% to 6.8% in November, with a further decline projected to 5.6% to 6.5% by December, according to the Finance Division’s latest economic report released on Wednesday.
The ‘Monthly Economic Update and Outlook’ highlights that fiscal consolidation efforts, along with controlled inflation, will help stimulate economic activity in the coming months.
After peaking at a record high of 38% in May 2023, inflation has been steadily declining, with October 2024 inflation recorded at 7.2%, slightly up from 6.9% in September.
The report anticipates that inflation will continue to ease in November and December, raising hopes for a potential rate cut in the near future.
Positive developments in agriculture and industry are cited as key factors supporting the ongoing economic recovery. On the agriculture front, wheat sowing is progressing as planned to meet production targets, with the government ensuring timely access to inputs at reasonable prices for farmers.
In the industrial sector, large-scale manufacturing (LSM) is demonstrating resilience. While year-on-year growth remains negative, month-on-month performance is improving, particularly in key sectors like textiles and automobiles.
The government is optimistic that continued policy support and external stability will sustain the recovery, with a cautiously positive outlook for the economy in the near term.
On the external side, the report notes that Pakistan’s current account shifted into surplus during the first four months of FY2025, bolstering the sustainability of the external sector.
The ministry forecasts that exports, imports, and remittances will continue their positive trend. Export values are expected to range from $2.5 billion to $3.0 billion in November, while imports are projected to be between $4.5 billion and $4.9 billion. Workers’ remittances are anticipated to range from $2.8 billion to $3.3 billion.
The finance ministry is confident that ongoing fiscal policies, combined with a stabilizing external sector, will lay the groundwork for sustained improvements in Pakistan’s economy.
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