ISLAMABAD: Inflation is expected to remain in the moderate range of 5.5 to 6.5 percent for December, the Finance Division said in its Monthly Economic Outlook report on Wednesday. 

Pakistan reported inflation at 6.1 percent on a year-on-year basis in November as compared to 6.2 percent in October. Pakistan’s inflation rate rose to a record high of 38 percent in May 2023 on account of surging food and fuel costs as Islamabad scrapped subsidies as part of a financial deal agreed with the International Monetary Fund (IMF). 

“Inflation is projected to remain moderate, in the range of 5.5-6.5 percent in December, primarily reflecting base effect,” the report said. 

The Finance Division’s report said Pakistan’s economic outlook remains “positive,” driven by sustained growth in industrial activity due to continued momentum in textiles, automobiles, cement and food processing sectors. 

“Robust remittance inflows and steady performance in IT and services exports are likely to cushion external pressures,” the report said. 

The report said Pakistan’s current account recorded a surplus of $100 million while it posted a deficit of $812 million during the July-November period.

It said remittances increased by 9.3 percent to $16.1 billion in November, led by inflows from Saudi Arabia (24.2 percent) and the UAE (20.8 percent), while the net foreign direct investment inflows were recorded at $927.4 million during the same July to November period. 

It said Pakistan’s fiscal consolidation is expected to continue supporting macroeconomic stability, with government efforts in expenditure management, enhanced tax collection and structural reforms contributing to sustainable growth. 

“Overall, Pakistan’s economy is projected to maintain its positive momentum in the coming months, driven by industrial growth, improved governance, digitalization, and prudent macroeconomic management,” the report said.