Pakistan Projects 3.5-4.5% Inflation for September

ISLAMABAD: The Ministry of Finance forecasts consumer inflation for September 2025 to range between 3.5–4.5%, attributing the projection to flood-related disruptions impacting Pakistan’s supply chains.

In its monthly outlook, the Ministry noted that despite challenges from recent floods, economic activity has remained largely stable. It highlighted a rebound in large-scale manufacturing, fueled by positive growth in cement dispatches, automobile production, and allied industries, signaling a robust industrial outlook.

Pakistan faced severe flooding during an extended monsoon season starting in late June 2025 and intensifying through September, severely affecting densely populated areas, particularly in Punjab.

The Ministry also projected stability in the external sector, with the current account deficit expected to remain manageable despite rising import demand. Remittances continue to provide significant support, exports show early signs of recovery, and declining global commodity prices may alleviate pressure on the import bill.

However, the Ministry cautioned that flood-related disruptions could strain food supply chains, potentially causing a temporary spike in inflation, though expected to stay within the 3.5–4.5% range for September.

According to Pakistan Bureau of Statistics (PBS) data, headline inflation was 3% on a year-on-year basis in August 2025, down from 4.1% in July 2025.

In related developments, the State Bank of Pakistan (SBP) opted to maintain the policy rate at 11% during its latest Monetary Policy Committee (MPC) meeting, citing the adverse impact of floods on the macroeconomic outlook.