ISLAMABAD: Pakistan’s headline inflation is expected to remain within the 3-4% range in June 2025, according to the Finance Division’s ‘Monthly Economic Update and Outlook’ released on Monday. This projection follows a slight uptick in inflation recorded at 3.5% year-on-year in May, up from just 0.3% in April, as per data from the Pakistan Bureau of Statistics (PBS).
The ministry’s forecast aligns closely with market expectations, though JS Global, a leading brokerage firm, projected inflation to ease slightly, forecasting a reading of 3.1% for June.
The Finance Ministry’s report painted a cautiously optimistic picture of Pakistan’s macroeconomic landscape as the country approaches the close of the fiscal year. “Inflation is expected to remain within the range of 3-4% for June 2025,” the update noted, citing improved supply conditions and continued policy discipline.
Economic Recovery Gaining Momentum
The report highlighted a positive outlook for the industrial sector, especially Large Scale Manufacturing (LSM), supported by a rebound in key high-frequency indicators, including cement dispatches and automobile sales.
Additionally, the uptick in credit disbursements to private sector businesses suggests rising production activities and growing investor confidence.
On the external front, the report projected that robust growth in remittances and exports will help maintain a current account surplus for FY2025. So far, the current account has recorded a surplus of $1.81 billion, a marked improvement from previous years.
Fiscal and Growth Indicators
The ministry noted that Pakistan’s economy continued to show recovery in FY2025, buoyed by strengthened macroeconomic fundamentals, disciplined fiscal management, and better performance in the external sector.
Real GDP grew by 2.68% during the fiscal year, while inflation steadily declined. The fiscal deficit narrowed, and the primary surplus reached 3.2% of GDP for the July-April period of FY2025. The report attributed improved policy credibility and investor sentiment to the continuation of IMF programs under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF), as well as upgraded sovereign credit ratings.
Agriculture Outlook Positive
In the agriculture sector, the government has set ambitious targets for the Kharif 2025–26 season, aiming for 2.2 million hectares of cotton cultivation and 10.18 million bales in production.
Farm input utilisation also showed encouraging trends. April 2025 data revealed urea and DAP offtake at 418 and 95 thousand tonnes, respectively—up 4.6% and 135.2% year-on-year. Estimated availability for the Kharif season stands at 4.012 million tonnes of urea and 840 thousand tonnes of DAP.
The government continues efforts to ensure the availability of quality seeds, fertilisers, credit, and modern machinery to support higher productivity in the agricultural sector.
With economic stability improving, the Finance Ministry’s latest outlook suggests Pakistan may be entering a period of moderate inflation and steady recovery, although continued structural reforms remain essential for long-term resilience.
