Finance ministry sees Pakistan’s headline inflation at 6-7% in October 2024

Pakistan’s headline inflation is expected to stay within the range of 6-7% in October and decelerate further to 5.5-6.5% by November, the Finance Division projected on Wednesday.

In its ‘Monthly Economic Update and Outlook’, the ministry said economic recovery is expected to take advantage of declining inflation and continuation of fiscal consolidation in the coming months.

“It is expected that inflation will remain within range of 6-7% in October and further down to 5.5 – 6.5% by November 2024,” read the report.

In September, CPI Inflation 2024 was recorded at 6.9% – lowest level in 44 months – compared to 9.6% in the previous month and 31.4% in September 2023, as per the outlook report.

Large-scale manufacturing

According to the report, large-scale manufacturing (LSM) continues to show mixed signals with YoY growth remaining negative, yet MoM growth indicates signs of recovery.

“Industrial output is gradually stabilizing, and key sectors are beginning to ramp up production,” it noted.

“Although challenges persist, particularly in the domestic market, the outlook remains cautiously optimistic.”

The finance ministry was of the view that the positive monthly growth suggests momentum could gather in the coming months, supported by a favourable economic environment on both domestic and external fronts.

Agriculture

On the agriculture front, the report raised concern over cotton production, however, it said that the sector’s push toward mechanization and better resource management offers a promising outlook for FY2025.

“This trend aligns with the government’s broader vision of promoting sustainable agricultural growth through technological advancement,” read the monthly outlook.

External front

On the external front, the finance ministry noted that imports are reasonably increasing and provide impetus to economic recovery.

“Based on the currently observed trend, it is anticipated that in October 2024, the exports will remain within the range of $2.5-2.8 billion, imports $4.5-4.9 billion and worker’s remittances $2.8-3.3 billion,” it said.