Pakistan’s Finance Division projects that inflation will stay within the 1% to 1.5% range for March 2025, following a significant decline to 1.5% in February. This decrease is attributed to aggressive policy rate cuts by the central bank and comprehensive economic reforms aimed at stabilizing the economy.
The Finance Division anticipates a slight uptick in inflation to between 2% and 3% in April, influenced by seasonal factors such as Ramadan and Eid festivals, which typically lead to increased economic activity. Additionally, a rise in foreign remittances is expected during this period, further contributing to economic dynamics.
High-frequency indicators, including growth in cement sales, increased automobile production, and higher imports, suggest a potential boost in production if demand conditions remain favorable. The government also notes an improvement in tax collection and a positive performance of the Pakistan Stock Exchange compared to major global indices.
Despite challenges, Pakistan’s foreign exchange reserves are projected to surpass $13 billion by June, bolstered by these economic reforms and increased remittances. The central bank reports that a significant portion of external debt obligations for the year has been repaid, indicating progress toward financial stability.
