Pakistan’s Ministry of Finance has projected inflation for September 2025 to stay between 3.5% and 4.5%, despite recent flood disruptions. The government cited stable economic activity and signs of industrial recovery as key reasons for the controlled price pressures. In its latest monthly economic outlook, the ministry emphasized that the economy is holding steady even in the face of climate challenges.
The ministry noted a rebound in large-scale manufacturing, supported by higher cement dispatches, automobile production, and growth in related sectors. These trends suggest industrial momentum may continue to improve in the coming months. While the floods caused delays and damage, especially in Punjab, they have not derailed the overall economic stability so far.
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In terms of external conditions, the outlook remains cautiously optimistic. The ministry said the current account deficit is expected to stay within limits, helped by strong remittance inflows, early signs of an export recovery, and a drop in global commodity prices. These factors may help manage the rising import bill, especially for essential goods.
However, the ministry warned that flood-related disruptions could push up food prices in the short term. The pressure on supply chains may lead to a temporary spike in food inflation. Still, authorities expect the overall inflation rate to remain within the projected range, easing concerns of a sudden surge in costs.
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Meanwhile, the State Bank of Pakistan (SBP) kept its policy rate steady at 11%, citing the uncertain impact of floods on the near-term economic outlook. In August 2025, headline inflation dropped to 3% year-on-year, down from 4.1% in July, according to the Pakistan Bureau of Statistics (PBS). This stability may provide some breathing room for consumers and businesses alike.