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fiscal and monetary expansion will create demand.

“So how will inflation fall?”

Therefore, to meet the 7.5 percent target for the next fiscal year, productivity must increase significantly while maintaining the current policy stance.

“The current fiscal year’s inflation target of 7 percent is impossible to achieve. As of April, inflation was above 9 percent. How will it fall below 8 percent by June?”

Electricity price adjustments will add about 1 percentage point to inflation directly and indirectly in the next fiscal year.

“However, this does not mean the adjustment is wrong -- prices had to be raised. Directionally, inflation is expected to rise compared to the current fiscal year. If it falls by chance, that would be different.”

Inflation can only be brought down by maintaining a tight monetary policy stance -- that is, by not lowering policy rates -- and by fiscal consolidation, following a revenue-based expenditure policy, Hussain added.

On inflation control measures, the finance ministry said that due to Middle East instability, the current policy interest rate will be maintained until June.

However, from July, rates will gradually be reduced to encourage investment while controlling inflation.

Government spending will prioritise social and economic sector projects. During the cost-of-living crisis, targeted subsidies will be provided, along with ensuring a low-cost goods supply.

The Family and Farmers’ card programmes will be expanded, market monitoring and price control strengthened, and import duties on essential goods reduced.

These measures will bring inflation down to less than 8 percent for the first time in four years in fiscal 2026-27 and 6.5 percent in the following year.

The finance ministry maintains that moderate growth is achievable even this fiscal year due to the government’s business- and investment-friendly policies and regulatory measures led by its aim to build a trillion-dollar economy by 2034.

The government expects to surpass the $600 billion-mark in its third year. The current size of the economy is less than $500 billion.

Economic liberalisation, improvements in the ease of doing business, establishing discipline and good governance in the financial sector, increased food grain production, industrial growth, higher remittances and expanded import-export activities will power growth.

“It is expected that investor interest will increase under an elected government,” the finance ministry official said.