Inflation slows to 17.3pc for April, lowest in nearly two years
Pakistan’s consumer price inflation slowed to 17.3 per cent in April from a year earlier, data from Pakistan Bureau of Statistics (PBS) showed on Thursday, the lowest reading in nearly two years and below the finance ministry’s projections.
Pakistan has been beset by inflation above 20pc since May 2022, registering a high of 38pc in May 2023, as it has navigated reforms as part of an International Monetary Fund (IMF) bailout programme.
Month on month inflation was down 0.4pc, showing negative growth for the first time since June 2023.
The Finance Ministry in its monthly economic report said it expected inflation to hover between 18.5pc and 19.5pc in April and ease further in May to 17.5pc-18.5pc.
“The inflation trajectory is slowing primarily on account of food inflation which has slowed down considerably,” said Faizan Kamran, chief executive of FRIM Ventures, a Karachi-based investment and research company.
Kamran added that he expects inflation to fall into single digits in the next five to six months.
The State Bank of Pakistan (SBP) kept its key interest rate unchanged at 22pc for the seventh straight policy meeting on Monday, hours before the IMF executive board approved $1.1 billion in funding under a $3 billion standby arrangement signed last year.
The bank’s monetary policy committee said in a statement it was “prudent” to continue with its monetary policy stance at this stage to bring inflation down to the target range.
An IMF statement following Monday’s approval by the board said that inflation, while still elevated, continues to decline, and, with appropriately tight, data-driven monetary policy maintained, is expected to reach around 20 per cent by end-June.
Antoinette Sayeh, Deputy Managing Director and Chair at the IMF, said Pakistan’s central bank’s tight monetary policy stance remains appropriate until inflation returns to more moderate levels.
Pakistan plans to approach the IMF again for a longer-term programme by early July. The country completed its nine month standby arrangement earlier this week.