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Finance Ministry Warns of Rising Inflation Ahead of Budget
The Finance Ministry warns of rising inflation ahead of the budget, predicting up to 4% inflation next month. Despite economic gains in remittances & exports, inflation and decreased FDI pose challenges.
ND
by News Desk
2025-05-29
Finance Ministry Warns of Rising Inflation Ahead of Budget

Islamabad — The Ministry of Finance has expressed concerns over a potential increase in inflation in its latest Monthly Economic Update & Outlook, just weeks before the federal budget is set to be unveiled.

According to the report, inflation is expected to rise to 1.5% to 2% this month, while next month it could surge to 3%–4%, reversing a relatively low annual inflation rate of 0.3% recorded in April.

The ministry attributes this looming increase to pre-budgetary market speculation and adjustments. However, despite the inflation concerns, the report outlines several positive economic indicators, including:

  • Remittances surged by 30.9%, reaching $31.21 billion from July to April.
  • Exports rose 6.8%, totaling $27.27 billion in the same period.
  • Current account surplus stood at $1.88 billion.
  • Imports increased 11.8%, hitting $48.61 billion.
  • Tax revenues jumped by 26.3%, collecting Rs9,300 billion.
  • Non-tax revenues increased 69.9%, reaching Rs4,099 billion.
  • Foreign exchange reserves of the State Bank of Pakistan increased to $11.4 billion.

The report also noted positive trends in large-scale manufacturing, vehicle production, and raw material imports, although a 1.47% decline in large-scale manufacturing was recorded from July to March.

In agriculture, favorable weather and improved water availability are expected to boost crop yields and contribute to overall economic growth.

However, Foreign Direct Investment (FDI) declined by 2.8%, totaling $1.78 billion, raising concerns about investor confidence.

The Ministry emphasized that maintaining fiscal discipline, continuing IMF negotiations, and curbing inflation will be key to sustaining this economic momentum going forward.
Tagged:

inflation

PakistanEconomy

Budget2025

FinanceUpdate
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