Ministry of Finance forecasts inflation to ease in April

WEB DESK: In March 2024, the Ministry of Finance, in its Monthly Economic Update & Outlook, projects inflation to range between 22.5 per cent and 23.5 per cent, with an anticipated gradual decrease to 21-22 per cent by April 2024.

Despite the recent upward adjustment in petrol prices and the customary surge in consumer spending during Ramazan, which typically widens the demand-supply gap, the outlook for inflation in March 2024 remains moderate, as stated in the report.

This moderation is attributed to the government’s determined efforts to alleviate inflationary pressures through enhanced administrative measures.

Additionally, the government has introduced a Ramzan Relief Package, increasing its allocation from Rs7.5 billion to Rs12.5 billion, aimed at providing relief to the public and mitigating the impact of increased demand during the religious festival.

Moreover, the report highlights the role of the high base effect and global factors in moderating inflation.

The Food and Agriculture Organisation’s food price index, a significant gauge of globally traded food commodities, decreased by 0.7 per cent in February 2024 compared to the revised January figures, with a year-on-year decline of 10.5 per cent.

This decline, driven by reductions in cereal and vegetable oil prices, counteracted increases in sugar, meat, and dairy prices.

Furthermore, the report underscores Pakistan’s improving economic and financial position throughout the current fiscal year, attributed to prudent policy management and the resumption of inflows from multilateral and bilateral partners.