Pakistan's Ministry of Finance tackles rising inflation

Headline inflation in Pakistan surged to 12.6% year-on-year in June, up from 11.8% in May, aligning with expectations. The Consumer Prices Index (CPI) increased by 0.5% on a monthly basis. This rise comes after a period of elevated inflation exceeding 20% since May 2022, peaking at 38% last year due to IMF reforms. However, there has been a gradual decline in inflation.

For the fiscal year 2023-24, the average inflation rate stands at 23.4%, lower than the previous year's 29.2%. The Ministry of Finance attributes the recent inflation uptick to higher prices of perishable items during Eid ul Adha and is actively working to stabilize prices and enhance the inflation outlook.

Brokerage firms had predicted a year-on-year inflation rate of approximately 12.5% for June, with an average of 23.8% for the fiscal year. Notably, food inflation is anticipated to decrease significantly, with a year-on-year rate of just 0.5% in June, marking a substantial improvement from the previous year.

In a bid to manage inflation, the government has enacted a tax-heavy finance bill for the current fiscal year, with projections indicating inflation could reach up to 13.5% by June 2024.

Inflation in Pakistan has been a significant economic concern, impacting the cost of living for citizens. While recent data shows a slight increase in inflation, efforts are underway to address the issue and stabilize prices. It is crucial for the government to continue implementing measures to curb inflation and ensure economic stability for the country.