Pakistan inflation eases to 22-month low at 17.3% in April amid monetary tightening

KARACHI: Pakistan’s inflation eased off to 17.3%, the lowest since May 2022, on a year-on-year basis in April 2024 from 20.7% recorded in March 2024 and 36.4% in April 2023, official data issued on Thursday said.

Pakistan has been beset by inflation above 20% since May 2022, registering a high of 38 percent in May 2023 mainly due to high food and energy costs. 

Pakistan’s central bank, which has kept the interest rate steady at 22% since June last year amid tight monetary tightening, had forecasted that ” inflation will continue to remain on downward trajectory further moderation.”

“Besides the coordinated tight monetary and fiscal policy response, other factors that have led to this favorable outcome include lower global commodity prices, improved food supplies and high base effect,” the central bank said in its monetary policy statement issued on Monday.

On a month-on-month basis, inflation decreased to 0.4% in April 2024 as compared to an increase of 1.7% in the previous month and a hike of 2.4% in April 2023, according to the Pakistan Bureau of Statistics (PBS). 

In April on an annual basis the prices of onions increased by 156.16%, tomatoes 126.67%, chicken 33.62% and meat 22.18%. In the non-food category, gas charges surged by 318.74%, electricity charges 71.12%, accommodation services 31.50%, transport services 26.70%, cotton cloth 23.00%, drugs and medicines 22.78%, and footwears 21.38%.

Urban core inflation measured by non-food non-energy items increased to 13.1% on an annual basis in April 2024 as compared to an increase of 12.8% in the previous month and 19.5% in April 2023.

Rural core inflation measured by non-food non-energy items increased to 19.3% on a year-on-year basis in April 2024 as compared to an increase of 20% in the previous month and 24.9% in April 2023.