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Inflation In Pakistan Slows Further To 20.7% In March

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Inflation In Pakistan Slows Further To 20.7% In March

(CTN News) – The Pakistan Bureau of Statistics (PBS) reported on Monday that the country’s headline inflation rate dropped to 20.7% in March from 23.1% in February. Month-on-month, the reading was up 1.7%.

Inflation has fallen to 13.8% since May 2022, shared JS Global. CPI-based  is also at its lowest level in over three years, falling below 22%, which is currently the key policy rate. Inflation in the July-March period was 27.22 percent, compared to 27.19 percent last year.

Inflation has fallen below the government’s expectations, strengthening the case for reducing the key interest rate. According to the Ministry of Finance’s ‘Monthly Economic Update and Outlook’ report on Friday,

Pakistan will see inflation in March 2024 hovering between 22.5-23.5%.

Although petrol prices rose and Ramadan had an impact on inflation, the ministry in March was moderate. Earlier, the government had announced an increased allocation of Rs7.5 billion from earlier to Rs12.5 billion for Ramadan relief.

During the religious festival, this will provide relief to the masses and cushion the effects of heightened demand. Moreover, the high base effect also moderates inflationary pressures,” according to the outlook report. A global context also influenced inflation dynamics, the report stated.

An Arif Habib Limited (AHL) report released last week predicted that inflation will fall further in March to around 20%, below the 23.1% level recorded in February. According to AHL, the projected YoY headline rate for March 2024 is 20.2%, lower than February 2024’s 23.1% rate.

In addition, IGI Securities estimated that the national CPI would grow by 20.3%.

According to the report, monthly growth for March 2024 will be +1.4%, compared to +0.0% month-on-month for February 24.

As a result of the high-base effect, experts expect to remain below 20% in the coming months despite the government’s late-night announcement.

Inflation in rural and urban areas

CPI inflation urban in March 2024 increased 21.9% on a year-over-year basis, compared to 24.9% in the previous month and 33.0% in March 2023, according to the PBS.

Monthly, it increased to 1.4% in March 2024, compared to 0.2% in the previous month and 3.9% in March 2023.

The CPI rate in rural areas in March 2024 was 19.0% on a year-over-year basis. It was 20.5% the previous month and 38.9% the year before.

Compared to the previous month, March 2024 saw an increase of 2.1% compared to a decrease of 0.3% and a 3.5% increase.

Predictions for SBP

SBP’s Monetary Policy Committee (MPC) maintained the key policy rate at 22% in its last meeting, its sixth consecutive decision to do so.

According to the statement, “The MPC noted that has begun to decline noticeably since H2-FY24, as expected.”

Although inflation decelerated sharply in February, its outlook remains uncertain due to elevated expectations despite the sharp deceleration. In order to bring down to the target range of 5–7% by September 2025, a cautious approach is warranted and requires continuity of the current monetary stance.”


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Alishba Waris is an independent journalist working for CTN News. She brings a wealth of experience and a keen eye for detail to her reporting. With a knack for uncovering the truth, Waris isn't afraid to ask tough questions and hold those in power accountable. Her writing is clear, concise, and cuts through the noise, delivering the facts readers need to stay informed. Waris's dedication to ethical journalism shines through in her hard-hitting yet fair coverage of important issues.

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