ISLAMABAD: The Ministry of Finance has predicted that the global supply chain improvement will ease domestic prices and inflationary trends in the coming months.
In its Monthly Economic Update and Outlook report, the ministry said that inflation continued in May due to political uncertainty, flood damages, disruptions in supply chains, and devaluation brought by macroeconomic imbalances.
The inflation for May 2023 remained in the range of 34-36 percent, according to the document issued on Tuesday.
The Consumer Price Index-based inflation reached a record high of 36.4 percent on a year-on-year (YoY) basis in April 2023, compared to a surge of 35.4 percent in the previous month and 13.4 percent in April 2022.
Favourable Conditions to Ease Inflation
However, the Ministry of Finance believed that a favourable international commodity rate outlook would likely offset the negative impact of the Rupee’s depreciation.
It is also hoped that the recent reduction in petrol and diesel administered rates will be transmitted into lower domestic rates of essential goods by impacting the transportation cost.
The Ministry said remittances decreased by 12.9 percent in May on a MoM basis.
The report added that it returned to a normal trend after observing a surge in March due to Eid ul Fitr-related factors. It is likely that remittances will increase in the coming months due to Eid-ul-Adha and other improvements in domestic and global environment.
The report further predicted that the current account deficit would likely remain within a sustainable limit.
The documents showed that Pakistan’s economy registered a 0.29 percent provisional GDP growth in Financial Year 2023.
