The Ministry of Finance, in its Monthly Economic Update & Outlook for May, has cautioned that inflation is expected to rise in the lead-up to the new federal budget.
The report forecasts that the current month’s inflation rate will range between 1.5% and 2%, while it may increase to between 3% and 4% in the following month. In April, the year-on-year inflation stood at just 0.3%, according to the document.
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Positive trends were noted in exports and remittances, with large-scale manufacturing (LSM) gradually picking up. The production of automobiles and imports of raw materials have also seen an upward trend.
Despite these improvements, the report indicated that LSM declined by 1.47% between July and March.
Better weather and increased water availability are expected to positively impact agriculture, potentially boosting crop production. This, in turn, could contribute to stronger overall economic growth, the report noted.
From July to April, remittances jumped by 30.9%, reaching $31.21 billion. During the same period, exports rose by 6.8% to $27.27 billion, while imports surged by 11.8%, totaling $48.61 billion.
The country’s current account showed a surplus of $1.88 billion over the July-April period.
On the downside, foreign direct investment (FDI) dropped by 2.8%, amounting to $1.78 billion.
Meanwhile, the State Bank of Pakistan’s foreign exchange reserves climbed to $11.4 billion during the past 10 months.
Tax collection rose by 26.3% between July and April, reaching ₨9.3 trillion. Non-tax revenue saw an even sharper increase of 69.9%, totaling ₨4.099 trillion, the report concluded.
