ISLAMABAD: Pakistan’s Finance Division said in its monthly economic outlook on Thursday that inflation for August is expected to remain within the 4-5% range, warning that flood-related damages may add fiscal pressures and disrupt food supplies.
Pakistan’s Consumer Price (CPI) inflation was recorded at 4.1% year-on-year (YoY) in July 2025, compared to 3.2% in June 2025 and 11.1% in July 2024. Pakistan’s economy has shown signs of stabilization in recent months after securing a $7 billion International Monetary Fund (IMF) bailout program in September 2024.
The Finance Division noted that the country’s economy entered FY26 with stable macroeconomic conditions and improved growth prospects, supported by a stronger external and fiscal position.
“However, flood-related damages may add fiscal pressures and disrupt food supplies in affected areas,” the report said. “Inflation is projected to remain within the range of 4-5% in August 2025.”
Devastating floods in Pakistan’s eastern Punjab province killed 17 people this week and inundated over 1,600 villages in the eastern province. Pakistani authorities were forced to evacuate over a million people to safer locations, as the country’s central disaster management authority warned that downstream floods are expected to cause destruction in southern Pakistan.
The report said a “favorable” global environment, stronger demand from trading partners, and Pakistan’s recent trade deal with the US are expected to boost exports.
The outlook said the government’s measures to facilitate investment, along with reforms to support private sector-led growth, easing inflation, and an “accommodative” monetary policy can help reinforce investors’ confidence.
