The Economic Coordination Committee (ECC) of the Cabinet convened a crucial session on Thursday, taking stock of the nation's economic health and greenlighting a substantial financial package exceeding hundreds of billions of rupees for the 2025-26 fiscal year. Chaired by Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb, the high-level meeting focused on inflation trends and food security before approving a wide array of proposals spanning financial, developmental, and social sectors.
Inflation Shows Marked Improvement, Averages 5.0%
Dr. Imtiaz Ahmad, Chief Economist at the Planning, Development and Special Initiatives Division, provided a comprehensive briefing on the economic landscape. The committee was informed that the overall inflation situation has demonstrated significant improvement in the current fiscal year, a testament to enhanced price stability and effective macroeconomic policies.
Headline inflation remained subdued in the initial months, recorded at 4.1 percent in July and 3.0 percent in August. While temporary supply disruptions from floods caused pressures in September and October, inflation later moderated, dropping to 6.1 percent in November. Crucially, the cumulative inflation average for July to November stood at 5.0 percent, which is markedly lower than the 7.9 percent seen in the same period last year.
This positive trend was attributed to prudent fiscal management, effective price control measures, and vigilant market monitoring. The committee also reviewed the Sensitive Price Indicator (SPI), noting a stabilizing trend for essential goods, with prices of 10 out of 51 key items declining on a weekly basis. With agricultural cycles normalizing post-floods, the ECC expressed confidence that continued policy coordination would further aid inflation containment.
Major Financial Approvals for Development and Social Sectors
Following the economic review, the ECC approved a series of major financial allocations. A significant approval was for Rs 5,760.270 million as a Technical Supplementary Grant for the Federal Education and Professional Training Division. This funding is earmarked for establishing Danish Schools in Azad Jammu and Kashmir, Gilgit-Baltistan, and Balochistan, and for implementing the Prime Minister’s Youth Skill Development Programme via NAVTTC. The committee advised the division to explore public-private partnerships to ensure long-term sustainability.
In other approvals:
- The Ministry of Housing and Works received Rs 5,190.000 million for development schemes under the SDGs Achievement Programme in Sindh and Khyber Pakhtunkhwa.
- The Pakistan Tourism Development Corporation was granted Rs 170.400 million for its FY2025-26 budget, with instructions to prepare a robust business plan aligned with the national tourism strategy.
- The Power Division saw multiple approvals: a revision of criteria for the PM's Fan Replacement Programme, Rs 6.358 billion for SDG schemes in Punjab, ICT, Sindh, and KP, and a massive Rs 200 billion for investment in DISCOs' equity to address cash flow constraints.
Addressing Humanitarian and Security Needs
The committee also addressed critical humanitarian and security concerns. It approved Rs 4.775 billion for disbursement to 945 families of missing persons, as identified by the Commission of Inquiry on Enforced Disappearances. Furthermore, funds were allocated for the maintenance of helicopters for Frontier Corps Balochistan (North) and Pakistan Rangers (Sindh).
Additional approvals included a revised plan for constructing 104 family suites for Members of Parliament and a Rs 40 million grant for defense sector development schemes under the SDGs programme. The committee also sanctioned Rs 250 million for operationalizing the King Hamad University of Nursing and Allied Medical Sciences.
The meeting was attended by federal ministers for Power, Petroleum, Commerce, Planning, National Food Security, and Investment, along with senior officials from relevant ministries and regulatory bodies, underscoring the comprehensive nature of the discussions.
