Inflation Rate Drops to 4.5% from 23.4% in One Year: Ministry of Finance

Islamabad: The Ministry of Finance has released its latest Monthly Economic Outlook, revealing a significant drop in the inflation rate—from 23.4% to just 4.5% over the past year. According to the report, Pakistan’s economy showed signs of recovery in the fiscal year 2024–2025, with a GDP growth rate of 2.68%.
For the first time in 14 years, the country recorded an annual current account surplus of $2.1 billion, while the fiscal deficit shrank to 3.1% of GDP.
The report highlighted a strong performance in the agriculture sector, with agricultural loans increasing by 16.6%, reaching over PKR 2,300 billion. Imports of agricultural machinery rose by 20%, urea consumption increased by 3.4%, and DAP fertilizer usage surged by 20%.
Industrial production also saw improvement. In May 2025, large-scale manufacturing output grew by 2.3% year-on-year.
The fiscal year also saw growth in remittances, exports, imports, and foreign direct investment. Remittances rose by 26.6%, reaching over $38 billion, up from $30 billion. Exports increased by 4.2%, and imports grew by 11.1%.
The Federal Board of Revenue (FBR) recorded a 26.3% increase in tax revenue over 11 months, while non-tax revenue surged by 62.7%. Additionally, the overall fiscal deficit dropped by 18.34% compared to the previous year.
Despite positive economic indicators, the Pakistani rupee depreciated by 5 rupees against the US dollar during the fiscal year. Nonetheless, official foreign exchange reserves reached $19.9 billion.
The report underscores an overall improvement in economic stability, driven by stronger revenue collection, increased remittances, and controlled inflation.