- Fitch upgrade of testimony of macroeconomic stabilization in FY25.
- Turnover growth exceeded expenses, reducing tax deficits.
- C/A posted $ 1.9 billion Profit with robust exports, transfers.
The Ministry of Finance and Revenue expects inflation to facilitate between 1.5% and 2% year by year (yoy) in May, before picking up up to 3% -4% in June, according to a monthly financial report published on Thursday.
Pakistan’s average inflation in the financial year, ending June 2025, is expected to be in the range of 5.5%-7.5%, the central bank said in its semi-year report last month.
The heading inflation is cooled to 0.3% (YOY) in April 2025, down sharply from 17.3% one year earlier and 0.7% in March, driven by broad-based falls across food and energy categories, the Pakistan Bureau of Statistics reported, with analysts who said it was a low-time low.
During July to April (10mfy25), inflation was recorded at 4.73%; Contrary to this, the FY24 inflation rate in July to April was bound to 25.97%.
The economy showed strong performance in May, as reflected in key indicators highlighted in the government’s monthly financial update and prospects.
The report said a recent upgrade of Fitch Ratings is a testimony to the macroeconomic stabilization of the outgoing financial year, supported by improved tax performance, surplus on current account and relief of consumer prices.
According to the report, revenue growth exceeded the expenses, reducing the tax deficit and further strengthening the primary profits.
The ongoing account issued a $ 1.9 billion profit with a robust growth in exports and transfers, the report said, adding that a record-low disinflation paved the way for a more welcoming monetary policy attitude.
The State Bank of Pakistan (SBP) on May 5 lowered the most important interest rate by 100 basic points (BPS), which brought it down to 11%, with the change, which came into force from May 6, 2025, mainly due to stable disinflation.
Explaining the move said the monetary policy committee: “Inflation fell sharply during March and April, mainly due to a reduction in managed electricity prices and continued downward food inflation.”
During the Christmas-Mar FY2025, total revenue grew by 36.7% to Rs 13.36 trillion, compared to RS9.78 trillion last year, led by a 68% increase in non-tax revenue reaching RS4,229 trillion, mainly driven by SBP profit, petroleum liver, expensive and Surge.
The Federal Board of Revenue (FBR) Tax collection also increased by 26.3% to RS9.3 trillion during Christmas-Apr FY2025, up from RS7.36 trillion last year.
Meanwhile, the external accounts further improved during the July-April FY2025, supported by increasing transfers and export growth despite higher imports. The current account issued a $ 1.9 billion profit that reversed a $ 1.3 billion deficit last year according to the monthly financial report.
