ISLAMABAD: Prime Minister Shehbaz Sharif on Monday directed Pakistan’s tourism authorities to take immediate steps to boost the country’s international profile as a travel destination, including launching a global branding campaign, creating special tourism zones and attracting long-term investment in the sector.

While the prime minister did not refer to it during a Monday meeting on tourism development, his comments come just three days after a deadly flash flood in the scenic Swat Valley killed 13 members of a single tourist family.

According to rescue officials in the Khyber Pakhtunkhwa province where Swat is located, 17 family members were swept away in the Swat River on Friday during a sudden rise in water levels caused by monsoon rains. Twelve bodies had been recovered as of Sunday, with search operations ongoing for the final missing person. The incident drew widespread condemnation in the media and online over what many called a slow response by emergency services.

“Pakistan’s tourism sector holds unlimited potential to earn foreign exchange,” the prime minister said at Monday’s meeting, according to a statement from his office.

“God Almighty has blessed Pakistan with natural resources and timeless beauty.”

Pakistan offers a diverse range of tourism attractions, drawing visitors with its dramatic landscapes, rich history, and vibrant culture.

From the snow-capped peaks of the Himalayas, Karakoram, and Hindu Kush in the north, home to some of the world’s highest mountains like K2, to the ancient ruins of Mohenjo-Daro and Taxila, the country blends natural beauty with archaeological significance.

The Hunza, Swat, and Skardu valleys are popular for trekking, mountaineering, and scenic retreats, while cities like Lahore, Karachi, and Islamabad offer a mix of Mughal architecture, bustling bazaars, colonial-era landmarks, and modern urban life.

Religious tourism is also growing, with sites such as Kartarpur for Sikh pilgrims and the Buddhist ruins in Takht-i-Bahi. Pakistan’s coastline along the Arabian Sea, its deserts, forests, and diverse cultures make it a unique destination with year-round tourism potential.

Sharif directed the Pakistan Tourism Development Corporation to move swiftly on plans to showcase the country abroad as a tourism brand, stressing public-private partnerships and stronger federal-provincial coordination to develop tourism infrastructure across the country.

“With snow-covered mountains, forests, rivers, as well as plains and desert areas, our country is not behind any nation in the world in terms of tourism,” Sharif said.

“Under the vision for national development, we will place Pakistan among the world’s leading tourist destinations.”

Officials at the meeting briefed the prime minister on proposals to promote medical tourism, develop recreational areas and improve access to northern tourist regions. 

Sharif emphasized encouraging domestic tourism alongside international promotion.

“Special measures should be taken to encourage domestic tourism and the arrival of local tourists at recreational spots,” he said. “Planning should be done to ensure long-term investment in the tourism sector.”

Since Friday’s tragedy in Swat, videos widely shared on social media have showed tourists stranded on rocks midstream, shouting for help as floodwaters surged. 

Survivors have widely said rescue services took hours to reach the scene.

The incident has sparked criticism over disaster preparedness in tourist areas.

The disaster was part of a broader wave of flash flooding across northern Pakistan last week, which has killed at least 32 people, according to rescue agencies.

Weather officials have warned of above-average monsoon rains this year, raising further concern over the vulnerability of tourist destinations in mountainous areas.

Forecasters say they cannot rule out a repeat of the “extreme situation” seen during devastating floods in 2022 when rains inundated a third of the country, killing 1,737 people and causing widespread destruction.

ISLAMABAD: Pakistan’s inflation is expected to remain between 3–4% in June, the country’s finance ministry said in its monthly economic outlook report on Monday, reflecting a sharp decline from the record highs of 2023, when inflation peaked at 38% amid political turmoil and external account pressure.

Annual inflation rose to 3.5% in May 2025, up from just 0.3% in April, according to official data from the Pakistan Bureau of Statistics. However, it remains far below the 38% peak recorded in May 2023 amid political turmoil and external account pressure.

“Inflation is expected to remain within the range of 3.0–4.0 percent for June 2025,” the finance ministry said, citing stable food supplies and fiscal discipline.

The ministry said recent economic indicators showed signs of recovery, with increased lending to the private sector suggesting a pickup in production and business confidence. On the external front, it projected that higher remittances from overseas workers and a modest uptick in exports would help maintain a current account surplus for the full fiscal year ending June 30, 2025.

From July 2024 to April 2025, federal revenue growth outpaced expenditures, which the ministry attributed to the effectiveness of its fiscal reform measures. Net federal receipts grew by 44.4% to Rs8,124.2 billion, up from Rs5,627.5 billion a year earlier.

“The rise in revenues is primarily contributed by 68.1% growth in non-tax collections,” the report said. “Similarly, tax collection witnessed a significant increase, as in Jul-May FY2025, it grew by 25.9% to Rs10,233.9 billion from Rs8,125.7 billion last year.”

Breakdowns of tax categories showed a 33.8% increase in federal excise duty, a 27% rise in direct taxes, a 26.5% jump in sales tax, and a 16.3% increase in customs duties.

Independent analysts say the macroeconomic outlook is improving, though risks remain. 
Brokerage house Topline Securities estimated on Monday that June 2025 inflation will clock in at around 3.2%, compared to 12.6% in the same month last year. This would bring average inflation for FY2025 to 4.6%, a significant drop from 23.9% in FY2024.

On a month-on-month basis, Topline expects a slight 0.2% increase in overall prices, driven largely by a 0.4% rise in the housing index due to fuel cost adjustments in electricity bills. However, food prices are forecast to decline by 0.5%, led by falling poultry prices.

Within the sensitive price index (SPI) basket, sharp price increases were observed in tomatoes (59.3%), potatoes (26.4%), eggs (7.4%), fresh fruits (5.7%) and onions (5.0%), while notable declines were seen in chicken (-32.5%), fresh vegetables (-12.2%), LPG (-6.6%), vegetable ghee (-0.4%), and cooking oil (-0.4%).

Topline said the recently announced FY2026 federal budget was broadly non-inflationary, with minimal changes to the tax structure and no major new levies, in line with IMF-supported fiscal goals. However, it cautioned that the government’s move to raise fixed charges for domestic gas consumers could push inflation slightly higher in coming months.

With gas having a weight of about 1.1% in the urban consumer price index, the brokerage estimated the hike could result in a 23% month-on-month increase in the gas index, translating to a 0.85 percentage point uptick in headline inflation.

Looking ahead, Topline projected that average inflation for FY2026 would hover around 5.4%, assuming no major shocks to the domestic supply chain or global commodity prices. It also expects the central bank to keep interest rates steady, noting that the full impact of recent rate cuts, totaling 1,100 basis points, has yet to fully transmit through the economy.