Inflation is likely to remain high in the coming months, with the government projecting headline inflation at 10 to 11 percent in September FY2027, according to the latest Monthly Economic Update & Outlook issued by the Government of Pakistan’s Finance Division.

The report said Pakistan’s economic recovery is expected to gain further momentum during FY2027, supported by improvements in agriculture and manufacturing as well as increased private sector borrowing.

Remittances and services exports are expected to continue providing support to household incomes and the country’s external position.

The report also noted that higher foreign exchange reserves and improved access to international capital markets have strengthened Pakistan’s ability to deal with external pressures.

However, international oil prices remain a key risk to the outlook. Higher oil prices could put additional pressure on household purchasing power, raise production costs and increase the country’s import bill.

The government expects the direction of inflation after September to depend significantly on developments in global oil prices.

To provide relief to vulnerable households, the government has launched the Prime Minister’s Fuel Relief Scheme. The scheme uses digital channels to deliver targeted assistance while keeping the petroleum levy unchanged.

According to the report, the government will focus on increasing revenue collection, ensuring that relief measures remain temporary and targeted, and advancing reforms in the energy and taxation sectors.

The Finance Division said these measures are intended to strengthen economic stability and support sustainable growth led by the private sector.