Pakistan's economy holds steady; inflation expected between 5-6pc, Treasury says
Business
Pakistan’s finance ministry says economic stability continues, inflation likely 5-6%, rupee stable, exports and remittances rising, and market confidence improving amid ongoing reforms.
ISLAMABAD (Dunya News) – Pakistan’s finance ministry has released its monthly economic outlook report, saying the current account deficit remains but inflation is expected to stay between 5 and 6 percent this month.
The report highlighted that economic stability has been maintained in the first half of the 2026 fiscal year, with the economy expected to keep its pace throughout FY 2025-26.
“Sound fiscal discipline has provided a solid footing for the economy,” the ministry said.
Inflation in December stood at 5.6 percent, down from 6.1 percent in November.
The ministry noted that growth in large-scale manufacturing (LSM) is improving, foreign exchange reserves are strong, and the rupee remains stable. Thanks to fiscal prudence, Pakistan achieved both a fiscal and primary surplus, and LSM growth is expected to pick up further in the coming months.
Remittances remain strong, supporting the country’s external accounts. The Pakistan Stock Exchange has also seen a sharp upswing, placing it among the top-performing markets globally, boosting investor confidence.
The report said the government has launched economic governance reforms aimed at institutional stability and sustainable growth. Large industries and other economic indicators have shown encouraging performance, with exports in IT and services on the rise.
While inflation has eased, allowing some flexibility in monetary policy, the current account deficit continues. However, pressure is expected to remain limited, according to the ministry.
