Islamabad, 2 August 2026 (Kamran Raja): Pakistan’s Ministry of Finance has warned that rising global oil prices could increase inflationary pressure in the country, projecting inflation to remain between 9 and 10 percent in July 2026.The ministry issued its monthly economic outlook report, highlighting key developments and challenges facing the national economy.According to the report, foreign direct investment (FDI) declined by 33.9 percent during fiscal year 2025-26. Pakistan’s exports also fell by 4.6 percent to US$30.8 billion during the fiscal year.
The report noted that workers’ remittances reached US$41.6 billion, reflecting an annual increase of 8.6 percent and continuing to provide significant support to the country’s external sector.The Ministry of Finance stated that Pakistan’s total foreign exchange reserves stood at US$22.7 billion as of July 17, while the State Bank of Pakistan’s reserves reached US$17.3 billion. Inflation eased slightly to 11.1 percent in June 2026 from 11.7 percent in May, while average inflation for fiscal year 2025-26 was recorded at 7.1 percent.
The report also warned of below-normal rainfall between July and September, raising concerns over water shortages for Kharif crops. It said cotton, rice, sugarcane, and maize could be adversely affected if rainfall remains below average.On the industrial front, large-scale manufacturing recorded 5.8 percent growth during the July–May period. The report further stated that the Federal Board of Revenue (FBR) collected Rs13.01 trillion in taxes during fiscal year 2025-26, marking a 10.8 percent increase compared with the previous year.According to the Finance Ministry, the fiscal deficit remained contained at 1.6 percent of GDP during the July–May period, reflecting continued efforts to maintain fiscal discipline despite ongoing economic challenges.