Pakistan's inflation rate is projected to drop to 3.5% to 4.5% in July, signaling economic recovery.

Pakistan's finance ministry projects July inflation to remain between 3.5% and 4.5%, down from 23.4% last year, citing stable prices and improved supply conditions. The economy is expected to maintain recovery momentum in early fiscal year 2026, supported by growing investor confidence and improved macroeconomic conditions. However, recent heavy rains pose risks to agriculture and supply chains, potentially affecting inflation. Large-scale manufacturing has shown growth, with rising private sector credit and expanding production activity.