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ISLAMABAD: The Economic Coordination Committee, chaired by Finance Minister Senator Muhammad Aurangzeb, reviewed inflation trends and approved key financial and development measures for FY 2025-26.
The committee was briefed that Pakistan’s overall inflation has shown marked improvement in the current fiscal year, reflecting enhanced price stability and effective macroeconomic management. Headline consumer price inflation was reported at 4.1 percent in July and 3.0 percent in August, before rising briefly due to flood-related supply disruptions in September and October.
It later eased to 6.1 percent in November, indicating an overall moderation in price pressures. The average inflation rate for July–November stood at around 5.0 percent, significantly lower than the 7.9 percent recorded during the same period last year, aligning with government projections. Weekly price monitoring through the Sensitive Price Indicator also showed stabilising trends in essential commodities, with prices of 10 out of 51 monitored items declining on a week-on-week basis, offering some relief to households.
The ECC noted that market supply conditions are gradually normalising as agricultural cycles recover following flood disruptions, and expressed confidence that continued policy coordination and strengthened monitoring would support further inflation containment in coming months. This improvement in inflation coincides with recent monetary developments, including the State Bank of Pakistan’s surprise 50 basis point cut to the policy rate to 10.5 percent, after inflation remained within its 5–7 percent target band, reflecting a cautiously easing monetary environment amid stabilising price trends.
After reviewing the economic situation, the committee approved a series of financial and development proposals. It allocated Rs 5,760.27 million through a Technical Supplementary Grant to the Federal Education and Professional Training Division for establishing Danish Schools in Azad Jammu and Kashmir, Gilgit-Baltistan and Balochistan, and for implementing the Prime Minister’s Youth Skill Development Programme through NAVTTC. The ECC advised the division to explore public-private partnership models to enhance sustainability of these initiatives.
The ministry of housing and works received approval for a Rs 5,190 million technical grant in favour of the Pakistan Industrial Development Corporation Limited for executing development schemes under the SDGs Achievement Programme in Sindh and Khyber Pakhtunkhwa. The ministry of inter-provincial coordination was granted Rs 170.4 million for the Pakistan Tourism Development Corporation’s budget, with directives to develop a comprehensive business plan emphasizing governance, staffing, and alignment with the national tourism strategy amid ongoing consultancy studies and international investment initiatives.
In a bid to promote energy efficiency, the ECC approved revisions to the eligibility criteria for funding under the Prime Minister’s Fan Replacement Programme. It also approved a Rs 6.358 billion technical grant for SDG-linked energy schemes across Punjab, Islamabad Capital Territory, Sindh and Khyber Pakhtunkhwa, along with a Rs 200 billion government equity injection into distribution companies (DISCOs) to address cash flow constraints in the power sector.
Addressing social concerns, the ECC approved Rs 4.775 billion for payments to 945 deserving families of missing persons as identified by the Commission of Inquiry on Enforced Disappearances, with disbursements to be supervised by the commission. The committee also sanctioned Rs 79 million and Rs 10.821 million for annual maintenance of helicopters for Frontier Corps Balochistan (North) and Pakistan Rangers (Sindh) respectively during the current fiscal year.
Additional approvals included a revised PC-I for constructing 104 extra family suites for members of parliament, with the Capital Development Authority directed to prepare a comprehensive asset maintenance plan. In the defence sector, the ECC approved Rs 40 million for SDG-linked development schemes and Rs 250 million for operationalising the King Hamad University of Nursing and Allied Medical Sciences in the current year.
The meeting was attended by federal ministers for power, petroleum, commerce, planning, development and special initiatives, national food security and research, and investment, along with federal secretaries and senior officials from relevant ministries, divisions and regulatory bodies.
Economists say the moderation in inflation reflects continued macroeconomic stabilisation and policy coordination, even as core price pressures and food price volatility remain areas of focus for policymakers. The government’s emphasis on maintaining stability while supporting inclusive growth is expected to shape fiscal and monetary strategies in the coming months.
