The inflation rate for May is likely to stay between 1.5-2% before picking up in June to 3- 4%, with exports and remittances to continue upwards trend and current account to remain manageable in the remaining part of the ongoing fiscal year, according to the Ministry of Finance.
In its monthly report, the ministry said the outlook for large-scale manufacturing might improve gradually in the coming months following year on year contraction and recent month-on-month declines. It said there was reason for cautious optimism in light of improvements in high-frequency indicators, including rising automobile output, raw material imports, and a more accommodative monetary stance.
According to the report, improved weather conditions and increased water availability are likely to support higher crop yields, contributing to overall economic growth.
The report noted that central bank’s Monetary Policy Committee had, earlier this month, reduced the policy rate by 100 basis points, to 11%, in view of a persistent decline in inflation.
Further, the report stated, broad money had grown by 4.7% from July 1-May 2 FY2025 against 7% in the same period last year. Net Foreign Assets increased to Rs. 1,210 billion from Rs. 590 billion, while Net Domestic Assets rose by Rs. 476.2 billion, significantly lower than the Rs. 1,588.3 billion recorded last year.
The Finance Ministry said private sector credit had expanded to Rs. 751.5 billion, higher than the Rs. 239.9 billion recorded in the corresponding period last year.
On agriculture, the report said Rabi season 2024-25 had seen wheat cultivated on 22.07 million acres with an estimated output of 28.98 million tons. Farm input utilization showed consistent improvement, supported by government efforts to ensure quality seeds, adequate credit, and availability of machinery and fertilizers.
Agricultural credit disbursement increased by 15% to Rs. 1,880 billion during July-March FY2025, moving steadily toward the annual target of Rs. 2,572.3 billion. Imports of agricultural machinery surged by 10% to $69.2 million in July-April FY2025, reflecting rising mechanization.
For the Kharif season 2025, availability of urea and DAP is estimated at 4,012 and 840 thousand tons, respectively. Whereas their estimated offtake stands at 3,152 and 796 thousand tons, which are 14.6% percent and 24% higher than last year, respectively.