By Staff Reporter
ISLAMABAD: The economy is showing signs of recovery as the finance ministry on Tuesday forecast a drop in inflation to 17.5 percent in May, following a series of strict administrative measures aimed at stabilizing the prices.
The inflation outlook for April 2024 continues a downward trajectory, attributed to the favorable base effect from the previous year and improvements in the domestic supply chain of essential items,” the ministry said in its Monthly Economic Update and Outlook for April 2024.
The inflation outlook appears moderate as the government is determined to reduce inflation by actively taking strict administrative measures.
The minister said high crude oil prices in the international market have forced the government to raise domestic petrol prices, which would be offset by the government initiative to reduce wheat flour prices and other administrative measures.
“The Food and Agriculture Organization’s food price index registered an increase of 1.1 percent in March 2024 over the revised February level. The increase was observed in vegetable oils, dairy products, and meat while a decline was recorded in sugar and cereals.,” the ministry said.
“Inflation is projected to hover around 18.5- 19.5 percent in April 2024. However, there are expectations of a gradual easing further to 17.5-18.5 percent in May 2024.”
The ministry said the economy was “on a resilient track to achieve modest growth this year, setting the basis for better performance in the upcoming fiscal year.”
“Headline inflation observed the lowest reading after 21 months,” it noted. “In March, CPI [consumer price index] inflation recorded the third consecutive YoY [year-on-year] decline, dropping to 20.7 percent from 35.4 percent last year. This decrease was observed throughout the third quarter of FY2024.”
Pakistan’s economy witnessed a major inflationary pressure in recent years after its governments sought IMF assistance amid dwindling foreign currency reserves and depreciating national currency.
The international lender urged the country to carry out economic reforms – such as removal of subsidies and increase in fuel charges and power tariffs – which led to spiraling inflation and pushed about 40 percent of its population below the poverty line.
Copyright © 2021 Independent Pakistan | All rights reserved
