Annual inflation clocked in at 29.2 per cent in November, data from the Pakistan Bureau of Statistics (PBS) showed on Friday, a slight increase from October but well below a peak of 38pc in May.

Compared with the previous month, inflation was 2.7pc.

The country is embarking on a tricky path to economic recovery under the caretaker government after a $3 billion loan programme approved by the International Monetary Fund (IMF) in July averted a sovereign debt default.

Measures demanded by the IMF include revising the country’s budget, hiking the policy rate, and increasing electricity and natural gas prices and taxes.

“A 280pc increase in gas prices during November has led to a higher Consumer Price Index (CPI) headline,” said Amreen Soorani, head of research at JS Global Capital. She said that going forward, the CPI’s trajectory is expected to decline on a year-on-year basis owing to a higher base effect.

“As of now, the projected disinflation trend leads to our 12M forward CPI to average close to 18pc, while policy rate today is at 22pc. Sharper than expected depreciation for the rupee against the US dollar is a key risk to our projections,” she added.

Former finance ministers Hammad Azhar and Miftah Ismail were more downbeat on the economic situation.

“Hard reality is that economy still very much in the dumps,” Azhar said.

Ismail said higher gas prices were to blame for the increase in monthly inflation.

On Nov 15, Pakistan had reached a staff-level agreement with the IMF on the first review of the bailout, which will unlock $700 million in funding.

The funds to be issued are a second tranche of the bailout, which is subject to approval from the IMF’s executive board.

Under the bailout deal, the IMF also got Pakistan to raise $1.34 billion in new taxation to meet fiscal adjustments. The measures fueled an all-time high inflation rate of 38pc year-on-year in May, the highest in Asia.