Economic recovery continues, but rains pose threat: ministry

The Ministry of Finance (MoF) on Monday projected that inflation for July would remain in the range of 3.5–4.5 per cent, though it warned that recent heavy rains could disrupt agricultural output and supply chains. In its Monthly Economic Update and Outlook, the MoF said inflation had declined sharply in recent mon­ths, supported by lower interest rat­es, exchange rate stability, and prudent macroeconomic management. Looking ahead, the ministry expects the economy to maintain its recovery momentum in early FY26, backed by improved fundamentals and rising investor confidence. “Large-Scale Manufacturing (LSM) is likely to retain its pace in June, driven by increased private sector credit offtake and higher production activity,” it said. The rebound is expected to boost imports of raw materials and intermediate goods while supporting exports of value-added products.