Pakistan’s CPI inflation expected to ease in early 2024

WEB DESK: In its monthly economic report released on Wednesday, the Finance Ministry disclosed that consumer price index (CPI) inflation in Pakistan is projected to hover between 27.5-28.5 per cent in December 2023.

The ministry anticipates a gradual decline, reaching 24-25 per cent in January 2024.

Despite the upward revision of administered prices, particularly in gas, the inflation outlook for the remaining months of the fiscal year 2024 remains moderate.

The report attributes this stability to several key factors, including a steady exchange rate, controlled aggregate demand, improved supply conditions, a moderation in international commodity prices, and a favourable base effect.

A noteworthy aspect contributing to the moderation of inflationary pressures is the recent reduction in petrol and diesel prices.

This reduction is expected to offset the impact of higher gas prices, offering relief to the common man by reducing transportation and production costs.

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The report highlights the collaborative efforts of sub-national governments in implementing lower fares for public transport and freight charges, aligning with the reduced fuel prices.

This coordinated approach is anticipated to further alleviate inflationary pressures.

In November 2023, the Consumer Price Index recorded a year-on-year inflation rate of 29.2 per cent, with a monthly increase of 2.7 per cent.

The current projections suggest a positive trajectory in the coming months, reflecting the collective measures in place to stabilise and mitigate inflation in Pakistan.