According to the finance ministry’s monthly economic report, inflation in Pakistan for October is projected to be between 27% and 29% based on the Consumer Price Index (CPI). However, it is expected to be lower compared to the high levels seen in the first quarter of the fiscal year.
Several factors contribute to this, including stability in international food prices reported by the FAO. While some food categories experienced a decline in prices (such as vegetable oils, dairy, and meat), others saw an increase (such as sugar and cereals), resulting in a balanced overall index value.
The government’s decision to reduce petrol and diesel prices, along with a stronger domestic currency and decline in international markets, is also expected to help reduce inflationary pressures in the country. Efforts by subnational governments to implement lower fares for local public and freight transportation in line with reduced fuel prices will further relieve stress on consumer prices.
In September 2023, the inflation rate was 31.4% compared to the previous month’s increase of 27.4% and September 2022’s increase of 23.2%, according to the Pakistan Bureau of Statistics (PBS).
Exports of goods and services for October are expected to remain around $3 billion, similar to September. Imports, on the other hand, may fluctuate and are predicted to be in the range of $4-4.5 billion in October due to the rupee’s gain against the US dollar.
Overall, taking these factors into account along with a positive outlook for remittances, the current account is expected to continue its improved monthly trend.
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