ISLAMABAD: Pakistan’s inflation rate is expected to continue its downward trajectory, easing to between 5.8% and 6.8% in November, with further moderation anticipated in December.
The Finance Division’s Monthly Economic Update and Outlook report, released on Wednesday, projected inflation to settle between 5.6% and 6.5% by December 2024, signalling a significant decline from earlier highs.
The government’s efforts to curb inflation have included a sharp reduction in interest rates. Earlier this month, Pakistan’s central bank slashed rates by 250 basis points, a move aimed at spurring economic growth amid easing price pressures.
Data from the Pakistan Bureau of Statistics (PBS) revealed a notable drop in inflation, which fell to 7.2% in October from a peak of nearly 40% in May. Inflation had been 6.9% in September, indicating a gradual stabilisation of prices following months of steep increases.
On the agricultural front, wheat sowing is progressing as planned, with the government ensuring the timely availability of key inputs for farmers at affordable prices, the report noted.
However, the country’s large-scale manufacturing sector continues to face challenges, with year-on-year growth still in the negative. Yet, there are signs of recovery in certain industries, including textiles and automobiles, which showed month-on-month improvements in production.
The finance ministry expressed cautious optimism, stressing the importance of external stability for the sustained recovery of the economy.
The report also highlighted a surplus in Pakistan’s current account for the first four months of the fiscal year, bolstering the country’s external sector.
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Looking ahead, the report forecasts that exports, imports, and remittances will maintain an upward trend.
Exports are projected to range between $2.5 billion and $3.0 billion, imports between $4.5 billion and $4.9 billion, and remittances between $2.8 billion and $3.3 billion in November 2024.
While there are signs of improvement, the report cautioned that the overall economic outlook remains dependent on continued fiscal and monetary policy support, as well as external factors influencing Pakistan’s economic recovery.
Earlier today, the Pakistan Stock Exchange (PSX) witnessed a strong rally as political tensions in the country’s capital eased, following Pakistan Tehreek-e-Insaf’s (PTI) announcement to call off its protest in Islamabad.
The benchmark 100 Index increased by 4,600 points its highest-ever single-day gain, just a day after it witnessed a massive sell-off due to political situation.
The trading house gained 4,695.09 points, showing a positive change of 4.96 percent. At close the index settled with 99,269.25 points as compared to 94,574.16 points on the last trading day.
A total of 1,057,104,968 shares were entertained during the day as compared to 1,116,324,649 shares the previous trading day, whereas the price of shares stood at Rs 39.556 billion against Rs. 43.291 billion on the last trading day.
