Economic recovery on track despite floods, border closures: Finance Ministry

The Federal Ministry of Finance on Monday released its monthly economic outlook report, noting that while recent floods and a temporary border closure put upward pressure on the prices of some basic commodities, the overall economic recovery remains on track.

According to the report, inflation for October is projected to remain between 5 and 6 percent, following a recorded rate of 5.6 percent in September 2025. The Ministry attributed the short-term increase in prices to supply chain disruptions caused by flooding in several agricultural regions and temporary border restrictions that have affected the flow of goods.

“The food supply chain affected by the floods has also contributed to price pressures,” the report stated. “However, steps are being taken to keep inflation within the set target range.”

Despite these challenges, the Ministry highlighted encouraging signs of resilience across the economy. Production in key industries — including cement, automobiles, and other major sectors — has shown notable improvement, reflecting continued industrial recovery.

In a positive development, the current account recorded a surplus in September, marking progress in the country’s external balance position. The report also confirmed that a staff-level agreement has been reached with the International Monetary Fund (IMF), a move expected to further strengthen investor confidence and fiscal stability.

“The recent floods have tested the economy, but the recovery process is visible,” said the report. “Continued policy discipline and targeted support measures are helping to sustain growth momentum.”

Reporter: Waqas Azeem