The Ministry of Finance has released its latest monthly economic update, revealing a significant improvement in Pakistan's economic landscape.
The report highlights a gradual decrease in the country's inflation rate, which reached its lowest level in 32 months in July 2024, marking a positive shift in the economy.
In July 2024, the inflation rate dropped to 11.1 percent, a sharp decline from the 28.3 percent recorded in the same month of the previous fiscal year. This drop in inflation is seen as a significant achievement for the government's economic policies, aimed at stabilizing the economy and easing the burden on consumers.
Alongside the decrease in inflation, the report also sheds light on other crucial economic indicators. Remittances saw a remarkable increase of 47 percent in July, reaching a volume of $3 billion. This influx of foreign currency is a positive sign for the country's balance of payments and overall economic stability.
Exports also showed a healthy growth of 12.9 percent, recording $2.4 billion in July, while foreign imports rose by 16.3 percent to $4.8 billion. These figures indicate a robust trade activity that is likely to support economic growth in the coming months.
The Ministry of Finance reported a 22.7 percent increase in tax revenue, amounting to Rs. 660 billion in July. Additionally, non-tax revenue saw an impressive surge of 78.3 percent, reaching Rs. 3,050 billion on an annual basis. These improvements in revenue collection are expected to contribute to the government's fiscal discipline and reduce reliance on external borrowing.
The current account deficit also witnessed a significant reduction, falling by 78 percent to just $200 million, which is a positive indicator of the country's external economic health.
Moreover, foreign investment increased by 64 percent, totaling $136.3 million, with the total foreign investment standing at $189.1 million. This increase in foreign direct investment (FDI) reflects growing investor confidence in Pakistan's economic prospects.
The rupee remained relatively stable against the dollar, with the exchange rate at Rs. 278.51 in August 2024, compared to Rs. 299.64 in August 2023. The stability of the rupee is crucial for maintaining the purchasing power of consumers and controlling inflationary pressures.
The Ministry of Finance also noted a reduction in the interest rate from 22 percent to 19.50 percent, which is expected to stimulate economic activity by making borrowing cheaper for businesses and consumers.
