Inflation likely to be between 3-4 pc in June

Islamabad: The Ministry of Finance has said in the monthly economic survey report that the inflation rate in June, as per the Consumer Price Index (CPI), is expected to be between 3 and 4 percent.

Last month, the Ministry of Finance expressed concern about the growth of large-scale industries (LSM), fearing an increase in inflation during May and June.

The year-on-year inflation rate in May 2025 was at its highest level since December, indicating a resumption of inflation after a gap of several months.

According to data released by the Pakistan Bureau of Statistics, the inflation rate in May was 3.46 percent, the report said, adding that the inflation rate for June 2025 is expected to be between 3 and 4 percent.

The report also said that the situation of large industries looks positive in the coming months, based on indicators such as cement sales and vehicle purchases.

Sales of cars, Sport Utility Vehicles (SUVs), pickups, and vans reached 14,762 units in May, showing a 35 percent year-on-year and 39 percent month-on-month increase.

However, according to the Ministry of Finance, the performance of LSM in April 2025 was mixed, with an increase of 2.3 percent year-on-year but a 3.2 percent month-on-month decline.

The report further said that the increase in credit to the private sector reflects the improvement in output and the restoration of investor confidence.

Regarding the current account, the report said that the external account position has improved during the July-May period of the fiscal year 2024-25, thanks to an increase in remittances and exports.

According to the report, the current account is expected to remain in surplus during the fiscal year 2025, thanks to an increase in remittances and exports.

The report on the agricultural sector said that the use of quality seeds and mechanized cultivation is expected to increase agricultural production.

The report said that ‘imports of agricultural machinery increased by 10 percent to $69.2 million during July-April fiscal year 2025, indicating an increase in mechanized cultivation.’

Earlier this month, Federal Finance Minister Muhammad Aurangzeb, while presenting the Economic Survey 2024-25, had expressed confidence that the country’s economy would achieve a growth rate of 2.7 percent by the end of the fiscal year.

According to the National Accounts Committee, the GDP growth rate in the first quarter of fiscal year 2025 was 1.37 percent, in the second quarter it was 1.53 percent, and in the third quarter it was 2.4 percent, which means that to achieve the target of 2.7 percent, a growth rate of 5.5 percent will have to be achieved in the 3 months of April-June.

However, this rate is still below the set target of 3.6 percent, making this the third consecutive year that the government has failed to achieve its set growth rate.