ISLAMABAD – Pakistan’s inflation rate has dropped to 4.5%, down from 23.4% last year, marking the lowest level in nearly a decade, according to the Finance Ministry’s latest economic report.
The report, released Monday, says inflation remained 3.2% in June and is expected to stay between 3.5% and 4.5% in July, supported by stable prices and improved supplies of essential goods.
The economy grew by 2.68% during the fiscal year 2024–25, while the current account posted a $2.1 billion surplus—a rare development last seen 14 years ago. The fiscal deficit was also brought down to 3.1% of GDP.
The ministry noted a strong rise in overseas remittances, which increased by 26.6%, reaching more than $38 billion, compared to $30 billion the year before. Exports grew by 4.2%, and imports by 11.1%, while foreign exchange reserves reached $19.9 billion.
On the revenue side, the Federal Board of Revenue (FBR) reported a 26.3% increase in collections during the first 11 months of the fiscal year. Non-tax revenues were also up by 62.7%. The fiscal deficit narrowed by 18.34% compared to last year.
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The agriculture sector showed improved activity. Agricultural loans grew by 16.6%, crossing Rs 2,300 billion, while imports of farm machinery went up by 20%. The use of urea rose by 3.4% and DAP fertilizer by 20%.
The report also noted signs of improvement in the industrial sector. Large-scale manufacturing grew by 2.3% in May 2025, driven by increased lending to private businesses and higher production activity.
The Finance Ministry expects this recovery to continue into the new fiscal year, supported by improving economic conditions, a stable exchange rate, and rising business confidence.
At the same time, the ministry cautioned that recent heavy rains could disrupt agriculture and transport systems, which might lead to a rise in prices in the coming months.
