The Ministry of Finance anticipates that Pakistan’s inflation rate will remain between 1% and 1.5% for March 2025, marking one of the lowest levels in recent years. However, a modest uptick is expected in April, with projections ranging from 2% to 3%.
This forecast follows the State Bank of Pakistan’s decision on March 10 to maintain the policy rate at 12%, after a cumulative reduction of 1,000 basis points since June 2024. The central bank cited elevated core inflation and potential external account pressures from rising imports as key considerations for this stance.
Despite these inflationary projections, the finance ministry reports signs of economic resilience. The fiscal deficit has narrowed to 1.7% of GDP in the first seven months of the fiscal year, down from 2.6% in the same period last year. Additionally, a primary surplus of 2.8% of GDP has been recorded, compared to 1.8% previously.
The ministry also highlights positive trends in large-scale manufacturing (LSM), with a month-on-month growth of 2.1% in January 2025, indicating a mild improvement. Sectors such as textiles, wearing apparel, and automobiles have shown positive growth. Furthermore, cement dispatches increased by 10.1% in February, reaching 3.6 million tonnes.
On the external front, exports, imports, and workers’ remittances are expected to maintain their upward trajectory. Remittances are likely to see a seasonal boost due to Ramadan and Eid, while increased economic activity is projected to enhance trade figures, contributing to a manageable current account balance.
