Business

CPI inflation expected to slow down

Likely to clock in at 26.4% during July 2023

Our Correspondent July 27, 2023

Experts have highlighted two major reasons for Pakistan’s record-high inflation reading of 36.4% in April: the sharp devaluation of the Pakistani rupee against the US dollar and the global rise in commodity prices. Photo: file

KARACHI:

Pakistan’s Consumer Price Index (CPI) inflation growth rate is anticipated to slow down modestly on a year-on-year (YoY) basis, reaching a low recorded in December 2022.

A report by research house AHL suggests that at the start of fiscal year 2024, there is an expectation of witnessing a decline in headline inflation on a YoY basis, marking a low point since December 2022 when it was recorded at 24.5% YoY.

“We expect inflation to clock in at 26.4% during July 2023 against 24.9% YoY recorded in the same period last year and a decline from 29.4% YoY registered in the previous month,” AHL’s analyst Sana Tawfik noted.

Monthly inflationary pressures are likely to persist in July 2023, with an expected MoM increase of 1.9%. Notably, the recent power tariff hike is expected to have a significant impact on the monthly inflation rate.

In July 2023, core inflation is expected to experience a slight uptick, reaching 21.2% on a YoY basis.

Looking forward, the main risks to overall inflation are expected to be driven by high food and energy prices, potential impacts of budgetary measures, and the vulnerability of a weaker currency.

Published in The Express Tribune, July 27^th, 2023.

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