ISLAMABAD   -  The ministry of finance has projected that inflation would decline in the range of 9.5-10.5 in the outgoing month of August.

“Inflation is expected to remain within the range of 9.5-10.5 percent in August and further decline to 9-10 percent in September 2024,” said ministry of finance in monthly report for August 2024. CPI inflation was recorded at 11.1 percent on YoY basis in July 2024 as compared to 12.6 percent in previous month, and 28.3 percent in July 2023.

On external front, exports, imports and worker’s remittances (WRs) are following an upward trend. For the outlook, it is expected that exports will remain within the range of $2.5-3.2 billion, imports $4.5-5.0 billion and WRs $2.6-3.3 billion in August 2024. The stable outlook of external sector hinges upon stable exchange rate, revived domestic economic activities, better agriculture output, low domestic and global commodity prices and improved foreign demand.

The recent and ongoing rainfall spells can have positive and negative impact on rice, sugarcane, cotton, fodder and vegetables, if the rains did not swept away the farmlands. The LSM sector is projected to sustain positive growth trajectory in FY2025 –on the back of improved external demand, stable exchange rate, receding inflation and easing of monetary policy. For agriculture outlook, Kharif 2024 production is dependent on the crops specific weather pattern, which will play critical role in crop yield. The recent and ongoing rainfall spells can have positive and negative impact on rice, sugarcane, cotton, fodder and vegetables, if the rains did not swept away the farmlands.

Pakistan’s economy started FY2025 with firm positive developments, setting a positive tone for the months ahead. As in July 2024, a drop in CPI inflation suggested that the economy is on track to achieve single-digit inflation in the coming months. Both the fiscal and external sectors have shown resilience, attributed to improved management. The current account has improved, and the FBR tax collection exceeded the target. The government managed to reduce the fiscal deficit to 6.8% of GDP in FY2024, down from 7.8% last year. The primary balance showed a surplus of 0.9% of GDP, in contrast to a deficit of 1.0% of GDP in FY2023.

The fiscal performance remained robust due to the prudent measures. Total revenues grew by 38.0 percent due to a notable increase in both tax and non-tax collection. Non-tax collection grew by 75.4 percent to Rs 3183.3 billion in FY2024 against Rs.1814.8 billion last year. FBR revenue growth continued its upward trajectory and surpassed the target by Rs.3.8 billion set for July 2024 as the net tax collection grew by 23 percent with tax collection at Rs.659.8 billion from Rs.538.4 billion last year. The external account position improved due to tangible increase in exports and remittances despite upsurge in imports. During July FY2025, the current account deficit shrank to $0.2 billion compared to $ 0.7 billion last year. Goods exports increased by 12.9 percent, reaching $2.4 billion, while imports recorded at $4.8 billion, compared to $4.1 billion last year (16.3% growth). This has led to a goods trade deficit of $2.4 billion, up from $2.0 billion last year. As per the Pakistan Bureau of Statistics, the export commodities that registered significant positive growth include rice (75.7%), fruits (13.1%), readymade garments (7.6%), and plastic materials (95.5%). The major imported items include petroleum products and crude ($0.9 billion), LNG ($ 0.3 billion), and palm oil, plastic materials and Iron & steel ($0.6 billion). Goods exports increased by 12.9 percent, reaching $2.4 billion, while imports recorded at $4.8 billion, compared to $4.1 billion last year (16.3% growth). The external account position improved due to tangible increase in exports and remittances despite upsurge in imports. Workers’ remittances reached $3.0 billion in July FY2025 (47.6% increase), with the largest share from Saudi Arabia. Pakistan’s total liquid foreign exchange reserves were recorded at $14.8 billion as on August 23, 2024, with the SBP maintaining $9.4 billion reserves. Foreign Direct Investment (FDI) stood at $136 million, 63.7 percent up from the previous year. The main contributors to FDI were China ($45.1 million), Hong Kong ($42.4 million), and UK ($22.3 million). The power sector received $62.2 million, accounting for a 45.6% share, followed by oil & gas exploration with $29.9 million (21.9% share). Moreover, Private Foreign Portfolio Investment (FPI) had a net inflow of $23.6 million, while Public FPI recorded a net inflow of $145 million.

The scope of BISP is being expanded to 9.3 million deserving families with an aim to empower beneficiaries and their families by equipping them with internationally recognized certifications and enhancing their employment prospects both locally and abroad. The Ministry of National Health Services, Regulations & Coordination organized a health week in capital’s slum areas from August 12th to 17th, providing medical services, malaria medication, and clean water facilities, reflecting government’s commitment to reducing disparities. In July 2024, PPAF 24,905 interest-free loans amounting to Rs.1.2 billion against 31,636 loans last year. During July, 2024 Bureau of Emigration & Overseas Employment has registered 64,897 persons for overseas employment in different as compared to 18.3 percent last year. The M/o of Federal Education and Professional Training has launched 20 pink buses, with the title “No Fear, No Barrier” to facilitate girl students and other females for rural to urban commutation.