MACROECONOMIC OVERVIEW

Pakistan’s economy continues its path of recovery and stabilization, reflecting the positive impact of ongoing reforms and the IMF-supported Extended Fund Facility (EFF) of US$7 billion. The exchange rate has remained largely stable around PKR280–282 per US Dollar, aided by improved foreign exchange reserves, prudent monetary management, and consistent inflows from multilateral institutions and remittances.

Inflationary pressures have eased further, with CPI inflation recorded at 0.3% YoY in April 2025, marking the lowest level in nearly six decades. The downward trend in inflation has allowed the State Bank of Pakistan to further reduce the policy rate to 11% in May 2025, continuing the easing cycle that began in late 2024. This has provided much-needed relief to the private sector and is expected to boost credit uptake and investment activity.