The Federal Ministry of Finance while counting government’s economic gains reported record surge in foreign investment, remittances, upward trend in exports and imports, surplus current account deficit and increase in State Bank’s reserves during the first seven months of the current fiscal year, reported 24NewsHD TV channel.
In its ‘Monthly Economic Update and Outlook’, the Finance Ministry said the rupee was strengthened, there was 25.2 percent rise in foreign remittances from July 2024 to January 2025 and during the same period the current account deficit was over $680 million surplus.
The ministry projected that the country’s headline inflation is expected to stay within the 2-3% range in February and may increase to 3-4% by March. It said a decline in inflation and the accommodative monetary policy are likely to further boost business confidence to support the large-scale manufacturing (LSM) recovery. “Inflation is anticipated to remain within the range of 2-3% for February 2025, however, there are prospects of a slight increase to 3-4% by March 2025,” read the ministry’s report.
Pakistan’s headline inflation clocked in at 2.4 percent on a year-on-year basis in January 2025, a reading below that of December 2024 when it stood at 4.1%, showed Pakistan Bureau of Statistics (PBS) data.
Last month, the Monetary Policy Committee (MPC) decided to further cut the policy rate by 100 bps to 12 percent. Cumulatively, the policy rate has been reduced by 1000 bps since June 2024. “The decision is based on inflation outcome in line with expectations, supported by moderate domestic demand conditions and supportive supply-side dynamics,” read the monthly outlook.
On the external front, exports, imports, and workers’ remittances are expected to maintain their upward trend, read the report. “In the coming months, remittances are likely to increase further due to seasonal factors such as Ramadan, Eidul Fitr and Eidul Azha. Similarly, exports and imports are projected to improve due to the expansion in economic activity. All these factors will help to keep the CAD within manageable limits,” it said.
The ministry warned that relatively dry conditions may cause water stress for Rabi crops, especially wheat in rain-fed areas.
Meanwhile, the recent monthly performance of LSM sector suggests a potential recovery in the upcoming months. “In January, LSM growth is expected to be supported by rising imports of machinery and raw materials, along with increased cement dispatches.”
Reporter Waqas Azeem