KARACHI: The State Bank of Pakistan (SBP) asserted that the inflation rate would ease to 20-22 per cent in the financial year 2023-24 (FY24) as the country heads into February 8 general elections, ARY News reported.
In an annual report on the past fiscal year, SBP Governor Jameel Ahmed said the central bank will continue to take decisions to prevent high inflation from becoming entrenched and keep expectations anchored to achieve the medium term target of 5 – 7 percent by the end of FY25.
According to the report, the inflation rate would ease to 20-22 per cent in FY24 on account of the impact of contractionary monetary policy, improvements in domestic supplies, softer non-energy global commodity prices, and the high base effect.
Pakistan witnessed historic high inflation in FY23, with the Pakistani Rupee falling to a record low against the US dollar, until an International Monetary Fund (IMF) deal helped stave off a sovereign default.
SBP Governor, in his report, pointed out that average inflation, measured by the consumer price index, surged to 29.2pc in FY23, which was around the upper bound of the bank’s revised projections.
Jameel Ahmed said the FY23 was extraordinarily challenging, with a host of external and domestic shocks, amplified by lingering structural weaknesses, contributing to persistently high inflation amid a contraction in economic activities.
“The year witnessed wide-ranging reverberating impact of the devastating monsoon floods, whereas elevated global commodity prices, less-thanenvisioned fiscal consolidation, and the delay in 9th review of IMF’s programme added pressures on the external account,” he added.
The report added that this outlook hinges on the absence of adverse shocks stemming from geo-political tensions and unforeseen climate events, and unfavorable movements in global commodity prices.
