Finance Ministry warns inflation may hit 7.5–8.5% amid Middle East conflict

Pakistan’s Ministry of Finance has warned of a significant rise in inflation due to the ongoing conflict in the Middle East, projecting that inflation for the current month could range between 7.5% and 8.5%.

In its monthly economic outlook, the ministry said higher global oil prices could increase industrial costs and widen the import bill, though it added that the economy is expected to remain stable despite global uncertainty.

According to the report, the fiscal deficit stood at Rs64.7 billion in the first eight months of the current fiscal year (July–February), while the primary balance recorded a surplus of Rs4,151 billion.

The current account deficit narrowed to $700 million during the July–February period. Foreign direct investment fell 33% to $1.19 billion.

The Ministry of Finance released the findings in its Monthly Economic Update & Outlook, highlighting that the Middle East conflict poses the key risk to inflation in the near term.