ISLAMABAD: The Ministry of Finance said that the consumer price index (CPI) inflation was expected to remain in the range of 3 to 4 per cent in June, according to its monthly economic outlook report.
Last month, the Ministry of Finance (MoF) expressed a cautious stance on the prospects for growth in Large-Scale Manufacturing (LSM) and projected an upward trend in inflation for May and June. In line with this forecast, the year-on-year consumer inflation rate in May marked its highest level since December, signaling a resurgence in inflation following several months of decline.
Data from the Pakistan Bureau of Statistics showed that the Consumer Price Index (CPI) inflation reached 3.46% in May 2025 compared to the same month last year.
“Inflation is expected to remain within the range of 3.0-4.0pc for June 2025,” said the finance ministry in its Monthly Economic Update and Outlook (June 2025) report.
The report indicated a positive outlook for Large-Scale Manufacturing (LSM) in the coming months, driven by promising signs in key high-frequency indicators like cement dispatches and automobile sales. In May, sales of cars, SUVs, pickups, and vans reached 14,762 units, representing a 35% increase compared to the same month last year and a 39% rise from April. Nonetheless, the Ministry of Finance noted that LSM displayed a mixed trend in April 2025, with a 2.3% year-on-year growth but a 3.2% decline on a month-on-month basis.
“The uptake in loans to the private sector businesses suggests rising production activities and improved investor confidence,” the report continued.
The report highlighted that the external account position showed continued improvement during the July to May period of the 2024-25 fiscal year, primarily due to an increase in remittances and exports. It further noted that strong performance in remittances and exports is likely to sustain the current account surplus throughout FY 2025. Regarding the agriculture sector, the report mentioned that the use of quality seeds and increased mechanisation is expected to enhance agricultural productivity.
“Imports of agricultural machinery rose by 10pc, worth $69.2 million in July–Apr FY2025, indicating rising mechanisation,” the report said.
Earlier this month, Finance Minister Muhammad Aurangzeb presented the Pakistan Economic Survey 2024-25, expressing optimism that the country’s economy would achieve a 2.7% GDP growth rate for the current fiscal year. According to the National Accounts Committee, GDP growth was recorded at 1.37% in the first quarter of FY25, 1.53% in the second, and 2.4% in the third.
To meet the 2.7% target set by the finance minister, the economy would need to grow by 5.5% in the final quarter (April to June). However, this projected growth remains below the 3.6% target, marking the third consecutive year the government has fallen short of its GDP growth goal.
