The federal government has forecasted inflation to remain within the range of 3 to 4 percent by March 2025, according to the Economic Update and Outlook February 2025 released by the Ministry of Finance. The report highlights positive economic developments during the July-January period of FY2025, signaling optimistic prospects for growth in the coming months.

The Finance Ministry predicts inflation to stay between 2 to 3 percent in February 2025, with a slight increase to 3 to 4 percent by March. The fiscal performance during the first half of FY2025 reflects the government’s effective consolidation measures, which have improved expenditure management and resource mobilization.

Large-Scale Manufacturing (LSM) growth in January is expected to benefit from rising imports of machinery and raw materials, as well as increased cement dispatches. Additionally, declining inflation and an accommodative monetary policy are likely to boost business confidence, further supporting LSM recovery.

The Finance Ministry emphasized that these measures are expected to keep the fiscal deficit lower than the previous year while maintaining fiscal discipline. With controlled non-markup expenditures, the primary surplus is also expected to improve in the coming months.

On the external front, exports, imports, and workers’ remittances are projected to maintain their upward trend. Seasonal factors such as Ramadan, Eid-ul-Fitr, and Eid-ul-Adha are expected to further boost remittances. Similarly, exports and imports are anticipated to grow due to increased economic activity, helping to keep the Current Account Deficit within manageable limits.