Finance ministry forecasts Oct inflation at 6-7%

October 30, 2024 (MLN): Inflation is expected to remain within the range of 6%-7% in October 2024, according to the Finance ministry's monthly economic report.

Finance ministry expects price gains to further ease to 5.5–6.5% by November.

During Jul-September FY2025, CPI Inflation stood at 9.2% while it was 29.0% in the same period last year.

YoY CPI Inflation in September 2024 was recorded at 6.9% - lowest level in 44 months, compared to 9.6% in the previous month and 31.4% in September 2023.

On the agriculture front, although the cotton production remains a concern, the sector's push toward mechanization and better resource management offers a promising outlook for FY2025, the report noted.

This trend aligns with the government's broader vision of promoting sustainable agricultural growth through technological advancement.

External sector stability sustained during Q1 FY2025. Imports are reasonably increasing and providing impetus to economic recovery.

Based on the currently observed trend, it is anticipated that in October 2024, the exports will remain within range of $2.5-2.8 billion, imports $4.5-4.9bn, and worker's remittances $2.8-3.3bn.

Pakistan's economy has demonstrated sustained recovery during first quarter of FY2025.

Stability in both the fiscal and external sectors has been maintained, supported by significant financial inflows.

Pakistan has received first tranche of $1.03bn under IMF EFF programme, reinforcing macroeconomic stability.

Moreover, successful hosting of SCO summit 2024 in Pakistan are paving the way for business and market confidence.

In the wake of positive developments, the economy will continue to observe sustainable economic recovery in the coming months, the report noted.

LSM continues to show mixed signals, with YoY growth remaining negative, yet MoM growth indicating signs of recovery.

Industrial output is gradually stabilizing, and key sectors are beginning to ramp up production. Although challenges persist, particularly in the domestic market, the outlook remains cautiously optimistic.

The positive monthly growth suggests momentum could gather in the coming months, supported by a favorable economic environment at both domestic and external fronts.

Economic recovery will take advantage of declining inflation and continuation of fiscal consolidation in coming months, the finance ministry said in the report.

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