Prime Minister Shehbaz Sharif on Thursday declared the downward trend of inflation as “welcome news” for the people, saying that inflation falling towards the lowest level in two years was a sign of improvement in the economy.

Consumer price inflation slowed to 17.3 per cent in April from a year earlier, data from the Pakistan Bureau of Statistics (PBS) showed today, the lowest reading in nearly two years and below the finance ministry’s projections.

Pakistan has been beset by inflation above 20pc since May 2022, registering a high of 38pc in May 2023, as it has navigated reforms as part of an International Monetary Fund (IMF) bailout programme.

Month-on-month inflation was down 0.4pc, showing negative growth for the first time since June 2023.

“This is the result of the hard work done during the 16-month-long government led by the Pakistan Democratic Movement (PDM) and continued by the interim government,” PM Shehbaz said in a statement issued by the PM Office.

He said bringing down the inflation rate was the top priority of the government. “With the support of God, the people will get more relief in coming days after increase in the economic activities.”

Shehbaz expressed the hope that the people might also get more relief by further cuts in the petroleum prices which were on a downward trend in the international market.

The prime minister directed the provincial governments to ensure that the impact of the fall in petroleum prices reached the common people and to take special measures for the implementation of food item prices fixed by the Centre.

“The life standard of the people will further improve with further improvement in the economy,” he said.

The government is trying its best to provide maximum relief to the people, the prime minister added.

The finance ministry in its monthly economic report said it expected inflation to hover between 18.5pc and 19.5pc in April and ease further in May to 17.5pc-18.5pc.

“The inflation trajectory is slowing primarily on account of food inflation which has slowed down considerably,” said Faizan Kamran, chief executive of FRIM Ventures, a Karachi-based investment and research company.

Kamran added that he expects inflation to fall into single digits in the next five to six months.

The State Bank of Pakistan (SBP) kept its key interest rate unchanged at 22pc for the seventh straight policy meeting on Monday, hours before the IMF executive board approved $1.1 billion in funding under a $3 billion standby arrangement signed last year.

The bank’s monetary policy committee said in a statement it was “prudent” to continue with its monetary policy stance at this stage to bring inflation down to the target range.

An IMF statement following Monday’s approval by the board said that inflation, while still elevated, continues to decline, and, with appropriately tight, data-driven monetary policy maintained, is expected to reach around 20 per cent by end-June.

Antoinette Sayeh, Deputy Managing Director and Chair at the IMF, said Pakistan’s central bank’s tight monetary policy stance remains appropriate until inflation returns to more moderate levels.

Pakistan plans to approach the IMF again for a longer-term programme by early July. The country completed its nine-month standby arrangement earlier this week.

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

Opinion

On writing

On writing

There is no ceremony or ritual that marks any person as a writer except the simple yet unimaginably significant act of starting to write.

Editorial

A way forward
Updated 17 Jul, 2024

A way forward

Before political leaders inflict more damage, they must give talks a chance.
Export delusions
Updated 18 Jul, 2024

Export delusions

Plummeting exports as a ratio of GDP is one of the major reasons driving the current economic slowdown and the balance-of-payments crisis.
Diversity in UK politics
17 Jul, 2024

Diversity in UK politics

THE recent UK elections have ushered in the most diverse parliament in the nation’s history. Under the leadership...
Banning PTI
Updated 16 Jul, 2024

Banning PTI

It appears that the govt and its backers within the establishment have still not realised that they are in uncharted territory.
Nato at 75
16 Jul, 2024

Nato at 75

EMERGING from the ashes of World War II, and locked in confrontation with the Soviet-led Communist bloc for over ...
Non-stop massacres
16 Jul, 2024

Non-stop massacres

Netanyahu is cunningly pretending to talk peace while mercilessly pounding Gaza. What is clear is that a return to pre-Oct 7 status quo is impossible.