(CTN News) – Pakistan’s consumer price index-based inflation for October is expected to be 27%-29%, according to the finance ministry’s monthly economic report released on Tuesday, which is based on the CPI.
As stated in the Finance Ministry’s latest ‘Monthly Economic Update and Outlook’ report, the government anticipates that inflation will drop in the second quarter of FY2024 from the higher levels seen in the first quarter.
According to the Food and Agriculture Organization (FAO), the development is attributed to several factors, among which is stability in international food price trends, as reported by the FAO.
There was a decline in the price for some food categories, including vegetable oils, dairy products and meat, but an increase in the price for others, such as sugar and cereals.
In the end, these fluctuations balanced out, resulting in an overall index of 121.5 points, nearly identical to August 2023.
On the domestic front, the interim government’s decision to reduce petrol and diesel prices consecutively in two instances, at a time when international markets were falling and the domestic currency was strengthening, is expected to mitigate inflationary pressures in the country, as noted in the report.
It should be noted that the subsequent efforts of the subnational governments to lower the fares of local public and freight transport, in accordance with the reduction in the fuel prices, would further relieve the stress on consumer prices, as stated in the Ministry of Finance report.
The Pakistan Bureau of Statistics (PBS) has reported that the inflation rate on a year-on-year basis was 31.4% in September 2023, compared to an increase of 27.4 % in September 2022 and 23.2% last month, based on the inflation reading.
As per the report, the exports of goods and services will remain around $3 billion in October, similar to what was observed in September, as per the previous report.
This trend will gradually take place in the coming months, as LSM shows some signs of turning point and posted growth of 8.4% in August on a monthly basis, according to the Ministry of Finance.
As the rupee continues to gain against the US dollar, imports, however, are showing some fluctuations on a monthly basis, and are expected to stay in a range of $4-4.5 billion in October, despite some fluctuations on a monthly basis.
As a result of all these factors, the current Inflation account will continue to observe its improved monthly trend due to the positive outlook for remittances, according to the report.