Rising tensions in the Middle East have been termed as a threat to the Pakistan’s economy, with inflation expected to remain high in the coming months.
The Ministry of Finance, in its Monthly Economic Update and Outlook Report, stated that there are no immediate signs of a decline in inflation.
The Ministry of Finance warned that higher global oil prices may increase more inflation, with rising costs of oil, electricity and transport posing additional pressure on consumers.
Inflation remained in double digits for the fourth consecutive month, with the rate recorded at 10.9 per cent in April, 11.7 per cent in May and 11.1 per cent in June.
The report stated that foreign direct investment declined by 33.9 per cent during the past year, falling from $2.47 billion to $1.63 billion.
The policy rate increased from 11 per cent to 11.5 per cent, according to the report.
The Ministry of Finance said economic reforms would continue the country’s development journey despite existing challenges.
The report set a growth target of 4 per cent for the current financial year and expressed hope that exports, remittances, industrial output and the agriculture sector would support economic recovery.
The exports declined by 4.6 per cent last year, reaching $30.8 billion, the report added.
The Ministry of Finance has expected that the economic improvement to continue during the financial year 2026-27, with stability supporting the pace of growth.
