ISLAMABAD: Pakistan’s economy showed improvement in May 2025, supported by better fiscal management, current account surplus, declining inflation, and a positive rating action from Fitch Ratings, according to the Ministry of Finance’s Monthly Economic Update and Outlook.
The report highlighted that revenue growth exceeded expenditure, narrowing the fiscal deficit and strengthening the primary surplus. Total revenue during Jul–Mar FY2025 grew by 36.7% to Rs 13,367 billion, up from Rs 9,780.4 billion during the same period last year. The increase was driven by a 68% rise in non-tax revenue, reaching Rs 4,229.7 billion, with significant contributions from SBP profits, petroleum levy, and other inflows.
FBR’s tax collection rose by 26.3% to Rs 9,300.2 billion during Jul–Apr FY2025, compared to Rs 7,361.9 billion in the corresponding period last year.
The current account recorded a surplus of $1.9 billion during Jul–Apr FY2025, reversing a deficit of $1.3 billion last year. The improvement was attributed to rising exports and remittances, despite a moderate increase in imports.
Inflation also slowed, with consumer price index (CPI) inflation at 0.3% year-on-year in April 2025, compared to 0.7% in March and 17.3% in April 2024. Month-on-month inflation declined by 0.8% in April.
In response to easing inflation, the Monetary Policy Committee cut the policy rate by 100 basis points to 11% on May 5, 2025.
Large-scale manufacturing (LSM) grew 1.8% year-on-year in March but contracted 4.6% month-on-month, reflecting mixed industrial performance.
Fitch Ratings upgraded Pakistan’s sovereign rating, citing macroeconomic stabilization, fiscal discipline, and improved external indicators.
