Inflation Projected at 3-4% for June 2025

Islamabad, June 30, 2025 — The Ministry of Finance’s “Monthly Economic Update and Outlook” forecasts inflation in Pakistan to hover between 3-4% in June 2025, following a year-on-year (YoY) Consumer Price Index (CPI) drop to 3.5% in May 2025 from 11.8% in May 2024, per the latest data. Economic growth in FY2025 persists, fueled by stronger macroeconomic fundamentals, prudent fiscal management, and enhanced external performance, with real GDP up 2.68%, a $1.81 billion current account surplus, and a fiscal deficit narrowing to a primary surplus of 3.2% of GDP for July-April FY2025.

The large-scale manufacturing (LSM) sector showed a mixed bag, with a 2.3% YoY growth in April 2025 but a 3.2% month-on-month contraction, and a cumulative 1.5% decline for July-April versus 0.3% growth last year. Yet, automobile production surged—cars (39.2%), trucks & buses (94.8%), jeeps & pick-ups (74.7%)—while cement dispatches rose 2.5% to 42.8 million tonnes, with exports up 25.7% despite a 1.9% domestic sales dip. Private sector loans reflect rising production and investor confidence, bolstered by remittances ($34.9 billion, up 28.8%) and exports ($29.7 billion, up 4.0%), though imports ($54.1 billion, up 11.5%) widened the trade deficit to $24.4 billion.

Fiscal receipts soared 44.4% to Rs8,124.2 billion, driven by a 68.1% non-tax surge, with tax collection up 25.9% to Rs10,233.9 billion, while expenditure rose 18.5% to Rs12,948.3 billion, offset by 40.6% PSDP growth. Foreign exchange reserves hit $17.0 billion (June 13), with FDI at $2.0 billion but a $624.4 million FPI outflow. The export outlook brightens with strong growth in key markets like the UK, US, Euro Area, and China.

Web context flags Pakistan’s economic recovery hurdles (e.g., debt at $130 billion, web ID: 0), while posts found on X show optimism—some cheer growth, others doubt sustainability. Critically, the narrative of “economic momentum” may mask structural risks—web data points to import reliance, and X sentiment suggests distrust in long-term stability, hinting at potential fragility.