The finance ministry said on Tuesday that inflation is expected to hover between 18.5 to 19.5 per cent in April and ease in May to 17.5-18.5pc, aiming for a target range of 5-7pc by September next year.

Gross domestic product growth for the second quarter of the fiscal year ending in June is estimated at 1pc and expected to improve in the second half of the fiscal year, it said in its monthly report.

The consumer price index for March was up 20.7pc from the same month last year, the lowest reading in nearly two years and below the finance ministry’s projections for the month.

The State Bank of Pakistan kept its key interest rate unchanged at 22 per cent for the seventh straight policy meeting on a day ago, hours before the International Monetary Fund executive board approved $1.1 billion in funding under a $3bn stand-by arrangment signed last year.

The Monetary Policy Committee said in a statement that it was “prudent” to continue with its monetary policy stance at this stage to bring inflation down to the target range.

It expects inflation to remain on a downward trajectory, but said that recent oil price volatility posed a risk. Consumers’ inflation expectations also edged up in April.