ISLAMABAD: The Finance Division’s Monthly Economic Update for October 2025 projects that inflation for the month will fall within a range of 5-6%, attributing the uptick to recent flood-related supply disruptions and temporary border closures affecting essential commodities.
The report, released on Monday, presented a mixed economic picture, highlighting strong fiscal and market performance alongside ongoing challenges. The Consumer Price Index (CPI) inflation for September 2025 was confirmed at 5.6% year-on-year, a rise from 3.0% in August.
On the fiscal front, the federal government reported a substantial improvement in its financial position. Net federal revenues during July-August 2025 surged by an extraordinary 231.4% to Rs. 3,269.8 billion. This dramatic increase was primarily fueled by a massive 721.1% jump in non-tax revenues, complemented by a solid 14.1% growth in FBR tax collections. During the same period, total federal expenditure was contained, growing by a more modest 7.6%.
The external account showed signs of balancing out. While the cumulative current account for the first quarter (July-September) registered a deficit of $594 million, it posted a surplus of $110 million in September 2025. The country’s foreign exchange reserves remained robust, standing at $19.9 billion as of October 17, 2025, with the State Bank of Pakistan holding $14.5 billion of that total.
In a standout performance, the Pakistan Stock Exchange (PSX) witnessed a significant rally, with the KSE-100 Index gaining 16,875 points to close September at 165,493. The bullish trend continued, pushing the index to 166,553 points by October 22, 2025, and elevating market capitalization to Rs. 19,212 billion.
The report also noted ongoing social and development initiatives, including the disbursement of Rs. 322.6 million in interest-free loans to thousands of beneficiaries and continued progress on privatization, digital governance, and infrastructure projects under CPEC Phase 2.0.
