ISLAMABAD: Highlighting pressures on food and non-food prices in coming months, the finance ministry on Tuesday further increased its inflation forecast to 30 per cent from its earlier projection of 26pc before easing out gradually.

The Consumer Price Index-based inflation on a year-on-year basis will be 28-30pc in coming months, said the ministry in its monthly economic update & outlook for February, adding that the recent political and economic uncertainties were pushing up inflationary expectations.

In January’s outlook, the ministry had revised up by more than double its inflation projection to 26pc from the budgeted 11.5pc.

The ministry expects inflation to remain high due to the uncertain political and economic environment, pass-through of currency depreciation, rise in energy prices and increase in administered prices in February.

Although the State Bank of Pakistan has been enacting contractionary monetary policy, the inflationary expectation would take some time to settle. The Centre, in liaison with provincial governments, is closely monitoring the demand-supply gap of essential items and taking necessary measures to stabilise their prices.

It is hoped that the resumption of the economic stabilisation programme will help achieve exchange rate stability providing an opportunity to reap the benefit of falling international commodity prices. This will also help contain cost-push inflation and provide a cushion to the government to pass through the lower commodity prices to domestic consumers.

Rabi wheat sowing target for 2022-23 has almost been achieved at 96pc covering 21.94 million acres. Moreover, the increased disbursement of agriculture credit is expected to help exceed the 28.4 million tonnes target.

The report observed the contraction in imports allowed the current account deficit to decline significantly to $3.8bn for July-January FY23 compared to $11.6bn in the same period last year.

Published in Dawn, March 1st, 2023

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Judiciary’s SOS
Updated 28 Mar, 2024

Judiciary’s SOS

The ball is now in CJP Isa’s court, and he will feel pressure to take action.
Data protection
28 Mar, 2024

Data protection

WHAT do we want? Data protection laws. When do we want them? Immediately. Without delay, if we are to prevent ...
Selling humans
28 Mar, 2024

Selling humans

HUMAN traders feed off economic distress; they peddle promises of a better life to the impoverished who, mired in...
New terror wave
Updated 27 Mar, 2024

New terror wave

The time has come for decisive government action against militancy.
Development costs
27 Mar, 2024

Development costs

A HEFTY escalation of 30pc in the cost of ongoing federal development schemes is one of the many decisions where the...
Aitchison controversy
Updated 27 Mar, 2024

Aitchison controversy

It is hoped that higher authorities realise that politics and nepotism have no place in schools.