Pakistan’s inflation is projected to stay between 3–4% in June 2025, according to the Ministry of Finance’s Monthly Economic Update and Outlook. This marks a steep drop from 11.8% in May 2024 to 3.5% in May 2025 (YoY CPI), highlighting improved price stability and relief for households facing cost-of-living pressures.
The ministry credited this positive trend to prudent fiscal management, improved external account performance, and better coordination in monetary and supply-side policies. As a result, real GDP growth reached 2.68% in FY2025 so far. The current account surplus hit $1.81 billion, and the primary budget surplus stood at 3.2% of GDP, showing that the government is managing both spending and revenues more effectively.
In the industrial sector, performance was mixed. Large-scale manufacturing (LSM) grew by 2.3% year-on-year in April 2025, but declined 3.2% month-on-month. The cumulative LSM numbers for July–April FY2025 showed a 1.5% contraction, compared to 0.3% growth in the same period last year. However, some industries surged: car production rose 39.2%, trucks and buses by 94.8%, and jeeps and pickups by 74.7%. Cement exports also surged by 25.7%, although domestic sales fell slightly by 1.9%.
Government revenues showed notable improvement. Net federal receipts rose 44.4%, reaching Rs 8.12 trillion, driven by a 68.1% increase in non-tax revenues, including profits from State Bank operations and petroleum levies. Tax revenues also grew by 25.9%, totaling Rs 10.23 trillion. While government spending rose by 18.5% to Rs 12.94 trillion, much of this went to development projects, as shown by a 40.6% increase in PSDP spending. Current expenditures grew at a slower rate of 17.8%.
On the external front, remittances reached $34.9 billion, up 28.8% from last year, driven by a recovery in labor markets in the Gulf and Western economies. Exports grew 4% to $29.7 billion, led by textiles, rice, and cement. However, imports jumped by 11.5% to $54.1 billion, widening the trade deficit to $24.4 billion from $20 billion last year. Foreign exchange reserves were reported at $17.0 billion as of mid-June 2025.
Looking ahead, Pakistan’s export outlook remains positive. Major trading partners like the US, UK, Eurozone, and China are showing upward trends in Composite Leading Indicators (CLIs), signaling potential demand growth for Pakistani goods. Policymakers remain focused on maintaining macroeconomic stability, supporting private sector growth, and ensuring that gains in inflation control translate into real relief for the public.