ISLAMABAD: The government anticipates further high inflation in the upcoming months, which might reach an all-time high of 38% in April due to increases in the cost of food and energy.
In its Monthly Economic Update and Outlook, published on Saturday, the finance ministry stated that “the inflation is projected to remain in a range of 36-38 per cent for April.”
Sensitive Price Indicator (SPI) data showed that short-term inflation was 46.8 per cent last week, barely below the record 47.2 per cent, seen a week earlier. The Consumer Price Index (CPI) reported monthly inflation at 35.4 per cent in March, the highest level ever.
According to the government, the weakening of the rupee and higher administered costs were factors in the total price increase. Despite a declining trend, it was noted that global commodity prices were still greater than they had been prior to the epidemic, said a report carried out by a leading English daily.
According to the report, the domestic supply of vital crops remained insufficient due to the sluggish recovery from flood-related damages, which exacerbated inflation. However, it added that despite the central bank’s contractionary monetary policy, “inflationary expectations are not abating.”
According to the ministry, the federal and provincial governments were keeping an eye on the demand-supply imbalance for necessities and “taking appropriate steps to ease inflationary pressures.”
In terms of agriculture, the ministry’s prognosis predicted that the supply of seeds, agricultural loans, and fertiliser would be enough for this year’s Kharif crops. The next three months, from April to June, are predicted to see slightly above-normal rainfall, thus, the weather could not stay nice.
According to the government, Pakistan’s economy is still dealing with serious issues, including high inflation and weak economic growth.
“Despite this, some encouraging signs are emerging due to government stability measures. For instance, the balance of payments’ current account saw a surplus. According to the report, this might ease the external funding restriction, increase exchange rate stability, and boost consumer confidence.
Additionally, it stated that the conclusion of the IMF programme would open the door for increased capital inflows, further sustaining the exchange rate and reducing inflationary pressures.
