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Finance Ministry Predicts Moderate Inflation, Highlights Mixed Economic Trends
Inflation expected between 3–4% in June, says Finance Ministry. LSM sees mixed growth, remittances & exports improve external account. GDP target still out of reach.
ND
by News Desk
2025-06-30
Finance Ministry Predicts Moderate Inflation, Highlights Mixed Economic Trends

The Ministry of Finance has projected consumer price index (CPI) inflation to remain between 3 to 4 percent in June 2025, reflecting a cautiously optimistic outlook despite broader economic challenges.

In its Monthly Economic Update and Outlook (June 2025) report released Monday, the ministry acknowledged inflationary pressure seen in May—where CPI hit 3.46%, the highest since December—signaling a mild rebound after a months-long slowdown.

Awais Ashraf, Director of Research at AKD Securities, echoed the ministry's estimates, predicting inflation would hover around 3.2% in June.

On the industrial front, the report provided a mixed assessment. While April 2025 saw a year-on-year LSM growth of 2.3%, it contracted 3.2% month-on-month. However, early signs from May suggest a positive trajectory, supported by increased cement dispatches and strong vehicle sales. Auto sales surged, with 14,762 units of cars, SUVs, pickups, and vans sold—up 35% YoY and 39% MoM.

“The uptake in loans to the private sector suggests rising production and improved investor confidence,” the report stated, underscoring a revival in business activity.

In terms of external accounts, the ministry highlighted continued improvement in the current account surplus, fueled by growing remittances and exports. The trend is expected to sustain through FY 2025, providing relief amid macroeconomic pressures.

The agriculture sector also showed promise, with imports of agricultural machinery rising 10% to $69.2 million in July–April FY2025, indicating increased mechanization and use of quality seeds aimed at boosting productivity.

Earlier this month, Finance Minister Muhammad Aurangzeb presented the Pakistan Economic Survey 2024-25, projecting GDP growth of 2.7%. However, data from the National Accounts Committee showed lower-than-expected quarterly growth: 1.37% (Q1), 1.53% (Q2), and 2.4% (Q3). This implies the economy would need to grow 5.5% in Q4 (April–June) to meet the annual target—a challenging feat, analysts say.

Despite a stabilizing inflation outlook and improving external indicators, the government still faces hurdles in meeting its broader economic targets, including GDP growth, now missed for a third consecutive year.

 
Tagged:

inflation

GDP

PakistanEconomy

FinanceMinistry

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