According to data released by the Pakistan Bureau of Statistics (PBS) on Monday, the consumer price index (CPI) increased 11.8% in May compared to the same month last year. This was below the finance ministry’s projections and the lowest reading in thirty months.
A week before the central bank meets to review the key rate, which has stayed at a record high of 22% for seven consecutive policy meetings, the lowest reading is released.
Since May 2022, Pakistan has experienced inflation that is higher than 20%. In May of last year, as the nation worked through reforms as part of an IMF bailout program, inflation spiked as high as 38%. But since then, inflation has decreased.
Consumer prices dropped 3.2% month over month, marking the largest decline in over two years.
The finance ministry stated in its monthly economic report last week that it anticipated May 2024 inflation to be between 13.5% and 14.5%, then to drop from 12.5% to 13.5% by June of that same year.
“As a result of high inflation levels in the prior year, enhancements in the domestic supply chain of perishable goods, staple foods like wheat, and a decrease in transportation costs, the inflation outlook for May 2024 continues on a downward trajectory,” the report stated.
Amreen Soorani, head of research at JS Global Capital, stated that the real readings are even lower as a result of a more dramatic decline in food prices.
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