Government warns of higher inflation in next budget

ISLAMABAD: The government is signaling a potential rise in inflation for the coming fiscal year’s budget (2025-26).

It’s predicting the average inflation rate, based on consumer prices, could hit 7.5 percent. That’s quite a jump from the current fiscal year’s forecast of 5 percent.

The Planning Ministry has also sounded an alarm. They’re warning that if restrictions on imports are loosened and debt payments continue, the current account deficit could widen. This means the country’s external finances might face pressure in the new budget.

The annual Planning Coordination Committee is expected to meet on Monday, June 2, 2025. This meeting will be key for approving the overall economic plan for the next budget. For fiscal year 2025-26, they’re aiming for a 4.2 percent economic growth rate. This is a bigger target than the 2.68 percent seen in the current fiscal year.