Pakistan Inflation Forecasted to Remain Stable in June

The Finance Division anticipates that Pakistan’s primary inflation rate will likely hold between 3% and 4% in June of this year, according to a recent projection released on Monday.

The ministry stated in its ‘Monthly Economic Update and Outlook’ that inflation is expected to stay within the 3-4% range for June 2025.

Official data from the Pakistan Bureau of Statistics (PBS) indicates that Pakistan’s headline inflation reached 3.5% year-on-year in May, surpassing the 0.3% recorded in April.

Previously, JS Global, a financial services firm, had estimated a slightly lower headline inflation rate for Pakistan, projecting it at 3.1% for June.

The finance ministry’s report also suggests a promising outlook for Large Scale Manufacturing (LSM) in the upcoming months, driven by positive signals from high-frequency indicators such as cement dispatches and vehicle sales.

Furthermore, an increase in lending to private sector enterprises implies greater production activity and heightened investor confidence.

The monthly outlook also noted that increased remittances and exports would likely maintain a current account surplus for the fiscal year 2025.

Pakistan’s economy sustained its growth trajectory throughout fiscal year 2025, bolstered by stronger macroeconomic principles, sound fiscal policy, and improved performance in the external sector, the report stated.

Real GDP expanded by 2.68%, while inflation saw a steady decline. The current account showed a surplus of $1.81 billion, the fiscal deficit decreased, and the primary surplus reached 3.2% of GDP between July 2024 and April 2025.

It was further noted that the ongoing IMF programs (EFF and RSF), along with improved credit ratings, have reinforced policy credibility and investor confidence.

Agricultural Sector Performance

The monthly outlook indicates that the federal government has established goals for the Kharif season 2025–26, aiming for a cotton cultivation area of 2.2 million hectares and a production target of 10.18 million bales.

Moreover, the use of agricultural inputs continues to improve, aided by government initiatives to guarantee the accessibility of high-quality seeds, sufficient credit, machinery, and fertilisers.

For the Kharif season 2025, the projected availability of urea and DAP stands at 4,012 and 840 thousand tonnes, respectively. Urea and DAP offtake in April 2025, amounted to 418 and 95 thousand tonnes, reflecting year-on-year increases of 4.6% and 135.2%, respectively.