Pakistan’s inflation eased last month, providing space to the central bank to ease interest rates further.
Consumer prices rose 4.86% in November from a year ago, according to Pakistan Bureau of Statistics. That compares with a median estimate for a 5.1% gain in a Bloomberg survey and a 7.17% increase seen in October.
Cooling inflation will allow the central bank to continue loosening its monetary policy. The State Bank of Pakistan has cut its benchmark rate by 700 basis points since June. This has brought its target rate to 15% last month. Economists in a separate Bloomberg survey forecast the key rate to be 13.5% by the end of the current fiscal year, which ends in June 2025.
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Pakistan’s Inflation may decline further in next few months due to contained demand and improved food supplies, the central bank had said, allowing further cuts in interest rates. The International Monetary Fund projects consumer price gains to average 9.5% this year.
Prime Minister Shehbaz Sharif’s government has been facing public discontent over the nation’s economic conditions. But in the last few months its economy has stabilized as IMF’s $7 billion loan trickles in. Foreign exchange reserves have increased while import and currency restrictions that hurt industrial activity have eased.
This news is sourced from [Bloomberg] and is for informational purposes only.
