The report highlighted that inflation is anticipated to remain around 27.5-28.5 percent in January 2024 due to the high base effect.
Ministry of Finance Forecasts Decrease in Inflation Rate for February 2024. The Ministry of Finance announced on Wednesday that inflation in Pakistan is expected to further ease to 26.5-27.5 percent in February 2024, according to their monthly Economic Update and Outlook January 2024 report.
The report highlighted that inflation is anticipated to remain around 27.5-28.5 percent in January 2024 due to the high base effect but is forecasted to decrease in February. The recent surge in onion export orders following the Indian ban has strained local supply, leading to increased domestic prices. Similarly, disruptions in the supply of tomatoes due to severe weather conditions have contributed to price hikes, alongside reduced chicken supply from controlled sheds experiencing higher input costs.
However, the government has implemented measures to address these challenges, such as increasing the minimum export price for onions and lifting the ban on soybean imports. These actions are expected to ease the supply situation for perishables and chicken, consequently mitigating inflationary pressures.
Despite ongoing challenges like supply chain disruptions and increased utility prices, the decline in fuel costs offers a promising counterbalance, potentially alleviating the overall impact on consumers and production sectors.
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Furthermore, the Food and Agriculture Organization’s food price index, which tracks globally traded food commodities, saw a decrease in December 2023 compared to November, primarily due to decreases in the price indices for sugar, vegetable oils, and meat.
The Ministry of Finance’s forecast of a decrease in inflation rate for February 2024 brings a positive outlook for the economy, indicating efforts to stabilize prices and mitigate inflationary pressures.
