Finance Ministry forecasts decline in headline inflation to 9.5-10pc

The Finance Division on Friday said Pakistan’s headline inflation is estimated to decline around 9.5 to 10.5 per cent, which would potentially passed to consumers in coming months.

Economic indicators show stability, which increases the expectation of ease in the inflation range.

“It would decline further to 9 to 10 per cent in September 2024,” said the Ministry of Finance in its ‘Monthly Economic Update and Outlook’.

According to the Pakistan Statistic Bureau (PBS), headline inflation was recorded at 11.1 per cent year-on-year in July 2024, after declining from 12.6 per cent in June 2024.

The report noted that the external indicators such as export, import, and overseas Pakistanis’ remittances were following an upward trend which led the country to control inflation. 

“For the outlook, it is expected that exports will remain within the range of $2.5-3.2 billion, imports $4.5-5.0 billion and remittances $2.6-3.3 billion in August 2024,” it said.

It added that a stable exchange rate revived domestic economic activities, better agriculture output, low domestic and global commodity prices, and improved foreign demand relaxed CPI.

However, the report expressed concerns over ongoing rain and stated the spell has positive or negative impacts on rice, sugarcane, cotton fodder and vegetables, if rain did not sweep the farmlands it would positively impact the microeconomic activities.