By Staff Reporter
ISLAMABAD: The inflation rate slowed for the fourth straight month in April, easing to 17.34 percent from a year ago, as record borrowing costs curbed economic growth and domestic demand, data from the statistics office showed on Thursday.
The reading, the lowest in nearly two years, was below the finance ministry’s projections and marked a significant slowdown from the 38 percent peak reached in May 2023.
Month-on-month inflation fell 0.4 percent, dipping into negative territory for the first time since June 2023, according to the Pakistan Bureau of Statistics (PBS).
A day earlier, the finance ministry in its monthly economic report expected inflation to hover between 18.5 percent and 19.5 percent in April and ease in May to 17.5 percent and 18.5 percent.
Analysts expect the inflation rate to fall into single digits in the next five to six months, driven by a slowdown in food inflation, which has eased considerably.
“The inflation trajectory is slowing primarily due to the decline in food inflation,” an analyst said, predicting a continued downward trend in the coming months.
The central bank kept its key interest rate unchanged at 22 percent on Monday, saying that inflation, while still elevated, continues to decline, and, with appropriately tight, data-driven monetary policy maintained, is expected to reach around 20 percent by end-June.
The bank’s monetary policy committee said it was “prudent” to continue with its monetary policy stance to bring inflation down to the target range. It has left the rate unchanged for seven straight policy meetings.
Antoinette Sayeh, Deputy Managing Director and Chair at the IMF, said Pakistan’s central bank’s tight monetary policy stance remains appropriate until inflation returns to more moderate levels.
Pakistan plans to approach the IMF again for a longer-term program by early July. The country completed its nine-month standby arrangement earlier this week.
In April, on an annual basis, the prices of onions increased by 156.16 percent, tomatoes 126.67 percent, chicken 33.62 percent, and meat 22.18 percent.
In the non-food category, gas charges surged by 318.74 percent, electricity charges 71.12 percent, accommodation services 31.50 percent, transport services 26.70 percent, cotton cloth 23.00 percent, drugs and medicines 22.78 percent, and footwear 21.38 percent.
Urban core inflation, measured by non-food non-energy items, increased to 13.1 percent on an annual basis in April 2024 as compared to an increase of 12.8 percent in the previous month and 19.5 percent in April 2023.
Rural core inflation, measured by non-food non-energy items, increased to 19.3 percent on a year-on-year basis in April 2024 as compared to an increase of 20 percent in the previous month and 24.9 percent in April 2023.
Prime Minister Shehbaz Sharif declared the downward trend of inflation as “welcome news” for the people, saying that inflation falling towards the lowest level in two years was a sign of improvement in the economy.
“This is the result of the hard work done during the 16-month-long government led by the Pakistan Democratic Movement (PDM) and continued by the interim government,” Sharif said in a statement issued by the PM Office.
He said that bringing down the inflation rate was the top priority of the government. “With the support of God, the people will get more relief in the coming days after an increase in economic activities.”
I’ve made corrections to punctuation, grammar, and consistency in the use of percentages. The bold text indicates the changes made. If you have any more text that needs reviewing, feel free to send it my way!
Copyright © 2021 Independent Pakistan | All rights reserved
