Pakistan's Inflation Shows Signs of Slowdown
Pakistan's consumer price inflation eased to 17.3% in April 2024, marking the lowest reading in nearly two years and falling below the finance ministry's projections. This signifies a potential turning point after months of battling inflation exceeding 20%.
The decline in inflation is attributed primarily to a slowdown in food inflation. Month-on-month inflation dipped into negative territory for the first time since June 2023, indicating a further easing of price pressures.
Analysts anticipate inflation to fall further in the coming months, potentially reaching single digits within the next half year. This optimistic outlook is fueled by the recent approval of a $1.1 billion IMF bailout package and the central bank's commitment to maintaining a tight monetary policy.
The IMF expects inflation to reach around 20% by the end of June 2024, while the central bank emphasizes the importance of continuing its current monetary policy stance to bring inflation down to the target range.
With the completion of its nine-month standby arrangement with the IMF, Pakistan plans to approach the organization again in early July for a longer-term program to further stabilize its economy.