Inflation in Pakistan is expected to slow down to between 5.8% and 6.8% in November, with a further dip to 5.6%-6.5% in December, according to the finance ministry’s monthly economic report released on Wednesday.
The Finance Division’s Monthly Economic Update and Outlook stated that inflation is predicted to continue its decline, reaching a range of 5.6% to 6.5% by December 2024.
In an effort to boost the economy amid falling inflation, the central bank reduced interest rates by 250 basis points earlier this month.
Data from the Pakistan Bureau of Statistics (PBS) shows that inflation dropped sharply to 7.2% in October, a significant decrease from nearly 40% in May 2023, though it was slightly higher than 6.9% in September 2024.
The report also noted that the wheat sowing season is underway, with the government ensuring that farmers receive key inputs at reasonable prices to meet production targets.
On the industrial front, the large-scale manufacturing (LSM) sector is struggling to recover. While year-on-year growth remains negative, there are signs of recovery, with month-on-month production increases in key industries such as textiles and automobiles.
The Finance Division expressed confidence that continued policy support, along with external stability, would help sustain the recovery.
Additionally, the report highlighted a surplus in the current account for the first four months of FY2025, which is strengthening the external sector. For November 2024, exports are expected to remain between $2.5 billion and $3.0 billion, imports between $4.5 billion and $4.9 billion, and workers’ remittances between $2.8 billion and $3.3 billion.
