 "Pakistan's lowest consumer inflation in 20 months still tops 23 per cent")
Driven by a marginal decline in food prices, inflation, as measured by the Consumer Price Index (CPI) in February, slowed to 23.06 per cent year-on-year from 28.34 per cent in the previous month. This marks the lowest inflation rate recorded in 20 months, down from a peak of 37.97 per cent in May 2023.
Until December 2023, headline inflation had consistently remained around 29 per cent for three consecutive months, largely attributed to rising prices of essential food items and increases in gas and electricity rates. However, starting from January 2024, there has been a noticeable downward trend in the inflation rate.
The food index experienced a month-on-month decline of 1.62 per cent in February, attributed to decreases in the prices of both perishable and non-perishable products. This reduction in food prices played a significant role in the slight alleviation of total inflation, while other categories continued to witness upward trends, the Dawn reported.
The average inflation for the first eight months of FY24 stood at 27.96 per cent, compared to 26.19 percent during the same period last year. This exceeds the government’s projection of 21 percent. Additionally, the IMF has forecasted the average inflation for FY24 at 25.9 percent, representing a notable decline from the previous year’s 29.6 per cent.
According to the Pakistan Bureau of Statistics, month-on-month inflation remained unchanged, with February’s inflation recorded at 31.5 per cent, compared to the same month in 2023.
Impact Shorts
More ShortsHeadline inflation has remained elevated since mid-2022, following the implementation of measures by the PML-N-led coalition government as per IMF demands to unlock stalled funding.
In urban areas, inflation stood at 24.9 percent year-on-year and 0.2 percent month-on-month in February, down from 30.2 percent and 2.4 percent in January. Rural inflation was recorded at 20.5 percent year-on-year with a decrease of 0.3 percent month-on-month in February, compared to 25.7 percent year-on-year and 1.9 percent month-on-month in January.
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