ISLAMABAD: Pakistan’s finance ministry expects that inflation for July will be between 12% and 13%, with a further decrease expected in August to a range of 11.0% to 12.0%, according to its monthly economic outlook released on Tuesday (July 30).
The upcoming inflation figures, set to be announced by the statistics agency on Thursday, are highly anticipated by the central bank. The bank recently cut interest rates for the second consecutive time, as previous inflationary pressures have eased.
The report also highlights that the government has reduced the fiscal deficit to 4.9% of GDP for the period from July 2023 to May 2024, down from 5.5% the previous year.
Additionally, Pakistan reached a deal with the International Monetary Fund (IMF) earlier this month for a $7 billion loan program, which includes stringent measures such as increased taxes on farm incomes and higher electricity prices.
This agreement has sparked concerns among poorer and middle-class Pakistanis who face the dual challenges of rising inflation and increased taxes.
Despite inflation slowing in recent months after exceeding 30% in 2023, pressure remains. In June, Pakistan’s Consumer Price Index (CPI) increased by 12.6% year-on-year.
A religious political party Jamaat-e-Islami (JI) has staged a protest sit-in Islamabad and threatened to expand their sit-ins in major cities if their demands to address the high cost of electricity bills and review agreements with IPPs were not met.
