Pakistan inflation slows 23.2 pc in September

The inflation in KARACHI, Pakistan slowed in September, with the consumer price index CPI rising 23.2 per cent from a year earlier, the statistics bureau said on Saturday.

The bureau said prices were down 1.2 per cent from the previous month. In August, CPI hit a multi-decade high of 27.3 per cent year-on-year.

The CPI figure remains higher than the annual projection, but it is the first drop for months and offers a rare respite for a struggling economy that has been hit hard by historic floods.

Concerns over Pakistan's economy have been rising as foreign reserves run low, the local currency weakens and inflation soared despite the resumption of an International Monetary Fund IMF funding programme in August.

The country has suffered from external shocks stemming from global commodity prices and a rising dollar. In late August, floods killed over 1,500 people and caused billions of dollars of damage, which put more pressure on its finances.

The year-on-year CPI rise was pushed by increasing food prices, housing, electricity, gas, and fuels. The two categories contributed to a drop from the previous month.

After months of hikes aimed at removing costly subsidies and reintroducing levies to increase government finances as agreed with the IMF, Pakistan cut fuel prices by 5 per cent.

The finance ministry said that the drop in prices was due to a reduction of petroleum products prices in the international market, and was intended to provide relief to consumers.

The fuel price reduction will be approved by the International Monetary Fund in November, but it is not clear if it will be approved by the IMF, which will take up Pakistan's next programme review in November.