Inflation Risks Rise Amid Flood Impact, But Economic Outlook Remains Stable: Finance Ministry
ISLAMABAD — Inflation may face upward pressure due to recent flooding, but the overall economic outlook remains stable, according to the Ministry of Finance’s latest Monthly Economic Update and Outlook.
The ministry projects inflation to remain within the range of 3.5% to 4.5%, despite challenges posed by severe flooding in July. The report noted that inflation stood at 3% in August and averaged 3.5% over July and August.
“Despite the impact of floods, the economy has demonstrated resilience,” the report said. It highlighted continued economic growth and stability during the first two months of the current fiscal year. Notably, industrial output showed improvement, even in the face of climate-related disruptions.
The ministry credited the country’s primary fiscal surplus to strong fiscal discipline, increased revenues, and better expenditure management. Additionally, exports, worker remittances, and foreign exchange reserves are helping to sustain the external sector.
Monetary conditions remain stable, and a bullish stock market has reflected growing investor confidence, the ministry added.