A sigh of relief as inflation at lowest ebb of 17.3pc in two years
Business
It is expected inflation will fall into single digit in the next five to six months
- SBP maintains interest rate for seventh time in a row
- Pakistan's reserves also improve after getting IMF tranche
LAHORE (Web Desk) – Pakistan’s consumer price inflation has come down to 17.3 per cent in April, the lowest during the preceding two years, data from the Pakistan Bureau of Statistics (PBS) says.
Pakistan has been beset by inflation above 20pc since May 2022, registering as high as 38pc in May 2023, as it has gone through reforms as part of an International Monetary Fund (IMF) bailout programme.
Month-on-month inflation is down 0.4pc, showing negative growth for the first time since June 2023.
The Finance Ministry in its monthly economic report said it expected inflation to hover between 18.5pc and 19.5pc in April and ease further in May to 17.5pc-18.5pc.
“The inflation trajectory is slowing primarily on account of food inflation which has slowed down considerably,” said Faizan Kamran, chief executive of a Karachi-based investment and research company.
Kamran added that he expected inflation to fall into single digits in the next five to six months.
The State Bank of Pakistan (SBP) maintained its key interest rate unchanged at 22pc for the seventh straight policy meeting on Monday, hours before the donor agency executive board approved $1.1 billion in funding under a $3 billion standby arrangement signed last year.
Pakistan receives last tranche from IMF
The State Bank of Pakistan (SBP) received SDR 828 million (around $1.1 billion) from the International Monetary Fund (IMF) on Tuesday - a day after the Fund approved the last tranche for Pakistan under the $3 billion Stand-By Arrangement (SBA).
In a statement, the SBP said the amount would reflect in the foreign exchange reserves for the week ending on May 3.
Last week, the SBP said its foreign exchange reserves dropped by $74 million to $7.981 billion (in the week ending on April 19) because of external debt repayments.
IMF greenlights $1.1bn tranche
On Monday, the IMF approved disbursement of $1.1 billion tranche, concluding the second bailout package in eight years. The board met in Washington and completed the second review. It is learnt that all board members, except India, favoured the last installment for Pakistan.
