Despite robust growth in bank deposits, private sector lending has shown little progress over the past year, signalling a cautious approach by financial institutions. Meanwhile, overall inflation has declined to single-digit levels, largely driven by easing food prices, although the National Board of Revenue (NBR) continues to underperform against its revenue targets despite sustained growth over previous years.
These insights are highlighted in the November Economic Update and Outlook report, published on Monday by the General Economics Division (GED) of the Planning Commission. The report provides a comprehensive assessment of recent macroeconomic trends, including inflation, export performance, and fiscal indicators.
Inflation Trends and Food Prices
The report notes that overall inflation fell to 8.17 percent in October 2025, down from 10.87 percent in October 2024. This decline is attributed to stabilising food prices and improved supply conditions, supported by government measures and the easing of pressures from imported goods. Food inflation specifically fell to 7.08 percent, while external inflation edged up slightly to 9.13 percent, reflecting sustained costs in housing, transport, and healthcare sectors.
Rice, a staple commodity, has seen a notable price adjustment. Prices began to ease during the first half of 2025, aided by increased domestic stocks from the Aman harvest, imports, and government procurement programmes. As a result, the average retail price of rice has decreased, contributing to a reduction in rice-specific inflation to 13.77 percent. Fish and meat remain key drivers of food inflation, maintaining pressure on household budgets despite broader food price moderation.
Export and Fiscal Performance
Exports have experienced volatility over recent months, though the GED anticipates a moderate recovery in the near term. Meanwhile, the NBR continues to fall short of its revenue collection targets, highlighting persistent challenges in tax administration and compliance, despite years of growth in the economy.
Selected Economic Indicators
| Indicator | October 2024 | October 2025 | Notes |
|---|---|---|---|
| Overall Inflation (%) | 10.87 | 8.17 | Decline largely due to falling food prices |
| Food Inflation (%) | 9.76 | 7.08 | Rice, fish, and meat are major contributors |
| External Inflation (%) | 8.92 | 9.13 | Driven by housing, transport, and healthcare costs |
| Rice Inflation (%) | 16.42 | 13.77 | Supported by Aman harvest, imports, and government stocks |
| Bank Deposit Growth (%) | 11.5 | 12.3 | Robust expansion continues |
| Private Sector Lending Growth (%) | 9.8 | 9.6 | Lending remains largely stagnant |
The GED report underscores a mixed economic landscape: while monetary stability and easing inflation benefit consumers, slow private lending and inconsistent export growth may pose constraints on broader economic expansion.