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Thursday, July 18, 2024

Pakistan Forecasts Inflation Easing Amidst Economic Reforms

Pakistan grapples with inflation as the Finance Ministry projects moderation in March and April, highlighting fiscal measures and global trends amidst economic recovery efforts.

Pakistan grapples with persistent inflationary pressures, with March’s figures projected between 22.5% and 23.5%, signaling a slight moderation from previous highs. Despite challenges such as increased fuel prices and heightened Ramadan demand, the government’s administrative measures aim to stabilize prices. Furthermore, global trends, including a decline in food commodity prices, contribute to easing inflationary dynamics.

Major contributors to inflation encompass diverse sectors such as housing, utilities, and transportation. To alleviate the burden on low-income groups, the government introduced a Ramadan Relief Package, increasing allocations to Rs12.5 billion. Additionally, strategic measures aim to offset inflationary impacts, targeting both perishable and non-perishable food items, as well as transport costs.

Read More: Fuel Price Surge Looms Over Pakistan

Despite a 0.17% contraction in the previous fiscal year, Pakistan’s economy shows signs of recovery, particularly driven by robust expansion in the agriculture sector. Fiscal consolidation remains paramount for sustainable growth, alongside a continued influx of foreign investment and remittances. The recent staff-level agreement with the IMF underscores the government’s commitment to long-term economic reforms, paving the way for enhanced financial stability and confidence in Pakistan’s economic trajectory.