Pakistan projects 3-4 percent inflation next month ahead of June 10 budget
KARACHI: Pakistan expects inflation to pick up to between 3 percent and 4 percent in June, the Finance Ministry said in its monthly economic report released Thursday, as the country prepares to announce its federal budget for the fiscal year 2025-26 on June 10, a date that falls during the Eid Al-Adha holidays.
The ministry said consumer price inflation was projected to ease between 1.5 percent and 2 percent year-on-year in May, following months of steady decline driven by monetary tightening and a drop in food and energy prices.
However, it noted that inflationary pressures could resurface slightly next month due to seasonal factors and base effects.
'Improved weather conditions, better crop yields and a stable exchange rate have helped reduce inflation to a historical low,' the report said, adding that 'inflation is projected to remain between 1.5-2.0 percent in May, with a possible rise to 3.0-4.0 percent by June 2025.'
The State Bank of Pakistan, in its half-yearly report last month, forecast average inflation for the fiscal year ending June 2025 to remain within 5.5 percent to 7.5 percent, reflecting easing cost pressures across key commodities.
Finance Adviser Khurram Schehzad on Thursday confirmed the official timeline for the country's fiscal announcements in a social media post aimed at dispelling speculation about possible delays due to the Eid Al-Adha holidays.
'The dates are firm,' he said on platform X. 'As communicated earlier, the upcoming Federal Budget FY26 is on schedule to be announced on June 10, 2025. Similarly, the upcoming Pakistan Economic Survey FY25 is scheduled to be announced on June 9, 2025.'
Pakistan's macroeconomic outlook has improved in recent months, supported by a stronger current account balance, improved remittances and falling inflation.
However, authorities remain cautious as they seek to build on recent economic stabilization, steer the country toward gradual growth and reaffirm their commitment to ongoing economic reforms.
With input from Reuters
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Arab News
6 hours ago
- Arab News
‘Our hands are clean,' Pakistan briefs UNCA about conflict with India over Kashmir attack
ISLAMABAD: A top Pakistani representative on Tuesday told journalists at the United Nations (UN) that Pakistan had nothing to do with an April attack in Indian-administered Kashmir that sparked a four-day military conflict between the neighbors, reiterating Islamabad's offer to cooperate with New Delhi on militancy and other issues under a 'comprehensive dialogue.' Bilawal Bhutto-Zardari, a former Pakistani foreign minister, has been leading a nine-member parliamentary delegation, constituted by Prime Minister Shehbaz Sharif, to New York, Washington DC, London and Brussels to present Pakistan's stance on last month's standoff with India. The conflict, in which the two countries traded missile, drones and artillery fire, was triggered after India accused Pakistan of supporting militants who killed over two dozen tourists in Indian-administered Kashmir's Pahalgam resort town on April 22. Islamabad denies involvement. Speaking to United Nations Correspondents Association (UNCA), Bhutto-Zardari noted that immediately after the April 22 incident, Islamabad had offered its cooperation to New Delhi and the international community in investigating the assault. 'The prime minister of Pakistan, Shehbaz Sharif, offered publicly to India, the international community that Pakistan was ready to be part of any impartial, international investigation into this terrorist attack,' he said. 'We did so because we were confident that our hands are clean, and we had nothing to do with this terrorist attack. The Indian government refused Pakistan's offer and chose instead to conduct their illegal strikes.' He said Pakistan only ever acted in 'self-defense' after India attacked multiple Pakistani cities on May 7, but the difference between 2019 India-Pakistan cross-border airstrikes and the 2025 military standoff was that they were now in a more 'precarious position.' 'It's not a question of if, but when the next war is fought,' Bhutto-Zardari said. Nuclear-armed Pakistan and India have a history of bitter relations. Both countries have fought three wars, including two of them over the disputed region of Kashmir which either of the two claims in its entirety, since gaining independence from British rule in 1947. The latest conflict, the worst between the neighbors in decades, killed around 70 people on both sides and came to a halt with a United States-brokered ceasefire on May 10. 'I must emphasize that the global community today is less safe, post this ceasefire, post this conflict with India, then we were before,' Bhutto-Zardari said. 'And it's simply because that threshold for full-blown military conflict between the two nuclear-armed nations has come down.' Asking New Delhi to not use militancy as a 'political tool,' the former Pakistani foreign minister once again urged India to hold a dialogue with Pakistan to resolve all outstanding issues, including the Kashmir dispute. 'Pakistan's position today is that we would like to have a comprehensive dialogue with India,' he said. 'Pakistan would still like to cooperate with India to combat terrorism. We can't leave the fate of 1.5, 1.7 billion people in the hands of non-state actors and terrorists for them to decide at a whim that two nuclear-armed powers will go to war.' The Bhutto-Zardari-led Pakistani delegation arrived in New York on Monday as part of Islamabad's diplomatic outreach, amid heightened tensions with India despite the ceasefire between the two countries. Another delegation, led by Special Assistant to Pakistan Premier Syed Tariq Fatemi, is set to visit Moscow. In a meeting with US Acting Permanent Representative to the UN Dorothy Shea in New York, the Pakistani delegates urged Washington to play its role in ensuring a dialogue between Pakistan and India to address all outstanding issues, Pakistani state media reported earlier on Tuesday. Bhutto-Zardari expressed 'deep concern' over India's immediate attribution of blame to Pakistan without any 'credible investigation or verifiable evidence.' 'Such premature and baseless allegations exacerbate tensions and undermine prospects for constructive dialogue and peace,' he told the US envoy. On Monday, the Pakistani delegates held a meeting with the Organization of Islamic Cooperation (OIC) envoys at the UN, wherein they reaffirmed Pakistan's commitment to peace, restraint, and diplomacy, and called for the restoration of the Indus Waters Treaty by India, Pakistan's Permanent Mission to the UN said. India suspended the decades-old Indus Waters Treaty with Pakistan a day after the attack at the Pahalgam resort town. The move drew a sharp response from Islamabad, which said any attempts to divert or stop the flow of its waters by India would be considered an 'act of war.' About 80 percent of Pakistani farms depend on the Indus system, as do nearly all hydropower projects serving the country of some 250 million. 'Bhutto-Zardari expressed grave concern at the unilateral suspension of the Indus Waters Treaty — a move that Pakistan considers a blatant act of weaponizing water and a violation of international and treaty obligations,' the Pakistani mission said. The delegation also urged the UN Security Council to play a 'proactive role' in promoting de-escalation, ensuring respect for international law and treaties and facilitating peaceful resolution of disputes.
Arab News
8 hours ago
- Arab News
Pakistan, Uzbekistan to devise joint strategy for completion of UAP rail connectivity project
ISLAMABAD: Pakistan and Uzbekistan have agreed to formulate a joint strategy for the completion of the Uzbekistan-Afghanistan-Pakistan (UAP) railway project, Pakistani state media reported, amid Islamabad's efforts to open new regional trade avenues. The development followed a meeting between Pakistan's Railways Minister Hanif Abbasi and Uzbek Ambassador to Islamabad, during which the two figures held detailed discussions on the approximately 850-kilometer-long railway connectivity project, which includes a 647-kilometer rail track passing through Afghanistan. The trilateral initiative was launched in 2021 to enhance regional connectivity by linking Central Asia with Pakistan's southern ports of Gwadar and Karachi through Afghanistan. The project aims to improve trade access for landlocked countries and strengthen economic integration across the region. 'Upon completion of this project, Pakistan will gain the shortest and most efficient route to Central Asia, which will not only increase trade volumes but also strengthen the region's economy on a solid footing,' Abbasi was quoted as saying by the APP news agency. 'This railway corridor will significantly reduce transit time and transportation costs, benefiting all stakeholders.' Pakistan is seeking to leverage its strategic position as a key trade and transit hub to connect Central Asia with global markets and since last year, there has been a flurry of high-level visits, investment discussions and other economic engagements between Islamabad and Central Asian republics. Abbasi highlighted that the corridor is expected to handle an annual freight capacity of 15 million tons, which could help boost exports and imports across the region, according to the report. 'This project will not only reinforce economic ties but will also play a pivotal role in promoting regional peace and stability,' he said. On the occasion, Ambassador Tukhtaev acknowledged investment opportunities in Pakistan's railway sector and emphasized the importance of collaborative efforts to foster economic prosperity and create employment for both peoples, according to the APP report. Both officials also acknowledged the positive impact of the UAP project in promoting peace and stability in Afghanistan. Last week, Pakistan's Deputy Prime Minister Ishaq Dar also held a phone call with his Uzbek counterpart, Saidov Bakhtiyor Odilovich, to discuss steps to advance the UAP railway project, including the framework agreement and its signing mechanism. Over the years, the project has faced significant challenges, including security concerns in Afghanistan, and the need to reconcile differing railway gauges across the three countries. 'Emphasizing the importance of the Uzbekistan-Afghanistan-Pakistan (UAP) Railway Line Project for regional connectivity, both leaders agreed to work closely for an early finalization of the framework agreement,' the Pakistani foreign office said.
Arab News
9 hours ago
- Arab News
Libya's eastern-based parliament passed budget for its development fund
BENGHAZI: Libya's eastern-based parliament voted on Tuesday to approve a budget for its development and reconstruction fund, a parliament spokesperson and member said, although it is unclear if the money will be forthcoming given the country's divisions. The budget of 69 billion Libyan dinar ($12.71 billion) will be spread equally over three years, lawmaker Tarek Jroushi told Reuters, adding that the funds will be overseen by the parliament. Parliament spokesperson Abdullah Blheg earlier announced the approval of the budget in a post on X, without disclosing the budget amount. The fund, established in February last year by the eastern-based House of Representatives, has independent financial status, according to the parliament gazette. However it is unclear if the governor of the Tripoli-based Central Bank of Libya, Naji Issa, will hand over the money for the fund. The central bank, based in Tripoli, is the only internationally recognized depository for Libyan oil revenues, the country's vital economic income. The eastern development fund is headed by Belgasem Haftar, a son of military commander Khalifa Haftar. The Benghazi-based government of Osama Hamad is allied to Haftar, who controls the east and large parts of the southern region of Libya. The north African country's separate Tripoli-based Government of National Unity is headed by interim Prime Minister Abdulhamid Al-Dbeibah, who was installed through a UN-backed process in 2021.
