Finance ministry sees February inflation at 6-7% in Pakistan

Pakistan’s Ministry of Finance said on Friday the inflation reading was likely to remain within the range of 6% to 7% in the outgoing month of February 2026 - slightly higher than the reading recorded at 5.8% in January 2026.

The government expects the Consumer Price Index (CPI) to be in the range of 5-7% for the full fiscal year 2025-26.

“Inflation is expected to remain within the range of 6-7% in February,” Federal Ministry of Finance said in its latest monthly economic update and outlook, February 2026.

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“On average, during July-January FY26, it [inflation] stood at 5.2% as against 6.5% during the same period last year,” the monthly outlook read.

The ministry report stated that the economic activity was expected to maintain its upward trajectory in the ongoing fiscal year (FY26), supported by sustained macroeconomic stability, easing inflationary pressures, and an improved fiscal position.

The accommodative monetary policy, alongside continued fiscal consolidation and structural reforms, is likely to reinforce business confidence and private sector activity, according to the report.

“Growth is projected to be driven by a rebound in large-scale manufacturing (LSM), improved remittances, and resilient agricultural performance, while the external sector is expected to remain manageable amid stable exchange rate and contained current account pressures,” it said.

“Meanwhile, downside risks persist, particularly from geopolitical uncertainties and global commodity price volatility. However, the prudent macroeconomic management is expected to safeguard the stability.”

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Pakistan economic entered the third quarter of FY26 with improved macroeconomic fundamentals. Exchange rate stability, sustained growth in workers’ remittances, and rising IT exports have contributed to a manageable current account position‒collectively strengthening the external sector position.

“Further, fiscal consolidation has improved, with surplus in both fiscal and primary balances. In parallel, a sizeable portion of public debt was retired ahead of schedule marking a significant step in prudent debt management…

“Overall, the growth prospects have improved significantly, with momentum likely to strengthen in the remaining fiscal year, leading towards sustainable economic growth,” the report said.