ISLAMABAD – Pakistan is likely to witness elevated inflation during the current fiscal year, particularly in the coming months, the Finance Ministry’s latest Monthly Economic Update and Outlook revealed on Friday.
The report said average inflation stood at 7.1% in the previous fiscal year, up from 4.5% recorded in fiscal year 2024-25. Inflation also accelerated sharply in June, reaching 11.1%.
The ministry projects inflation to remain between 9% and 10% in July, while the country’s external sector is expected to remain stable. However, it cautioned that escalating geopolitical tensions in the Middle East could create inflationary pressures and pose risks to Pakistan’s external sector.
Despite these challenges, the report noted that the country’s economic recovery is continuing, with overall macroeconomic stability expected to remain intact.
The Finance Ministry highlighted several positive economic indicators from the previous fiscal year. Workers’ remittances rose to $41.6 billion, government revenue posted record growth, and exports reached $30.8 billion, reflecting improving economic activity.
The ministry said these gains indicate that the economy is on a path of gradual recovery, although external risks and inflationary pressures will remain key challenges during the current fiscal year.
