ISLAMABAD: Pakistan’s headline inflation hovered around 18.5-19.5 percent in April 2024, and will decelerate further in the coming months, the Finance Division said on Tuesday.
In its ‘Monthly Economic Update and Outlook’, the ministry said that the inflation outlook for the current month maintains a downward trajectory, attributed to the favorable base effect from the last year and improvements in the domestic supply chain of essential items.
As per the Finance Division, the inflation outlook seemed moderate as the government was determined to reduce inflation by actively taking strict administrative steps.
It said that inflation is projected to hover around 18.5- 19.5 percent this month. However, there are expectations of a gradual easing further to 17.5-18.5 percent in May.
In March, Pakistan’s headline inflation clocked in at 20.7 percent on a year-on-year basis, lower than the reading in February when it stood at 23.1 percent.
Meanwhile, in its monthly report, the Finance Division noted that due to an increase in crude oil rates in the global market, the government has also raised domestic petrol prices.
However, the rise in petroleum prices is likely to be offset by the government initiative to reduce wheat flour rates and administrative measures, it said.
In the report, the Finance Division maintained that during the first 9 months of the current fiscal year, there is a visible sign of moderate recovery in macroeconomic conditions in the country supported by encouraging growth in agriculture, stability in external accounts, and receding inflationary pressures.
Large-Scale Manufacturing Sector in Pakistan
The Finance Division said the positive momentum in Large Scale Manufacturing (LSM) sector is likely to remain intact for the remaining months of FY2024 mainly due to a significant increase in agriculture produce, higher export demand, improvement in Composite Leading Indicator of the country’s main export markets along with anticipation of exchange rate stability.
It added that the fiscal performance indicated some positive developments on the back of notable growth in revenues, however, increasing pressure on expenditures due to higher markup payments presents major challenges for fiscal management.
