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Pakistan inflation outlook December 2025 as Finance Division reports FDI decline and economic indicators

The Finance Division has projected inflation to remain moderate within the range of 5.5 to 6.5 percent in December, largely due to the base effect. According to the Monthly Economic Update and Outlook for December 2025, Consumer Price Index (CPI) inflation eased to 6.1 percent on a year-on-year basis in November, reflecting improving price stability.

However, the report highlighted a sharp 25.3 percent decline in Foreign Direct Investment (FDI) during July–November FY2026, with inflows falling to USD 927.4 million compared to USD 1.242 billion last year. Portfolio investment also turned negative, while total foreign investment dropped significantly. Despite these pressures, remittances rose by 9.3 percent, fiscal and primary surpluses were achieved, and large-scale manufacturing showed strong growth. The Pakistan Stock Exchange also recorded a strong recovery in November, indicating improved investor sentiment amid easing monetary conditions.

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