Islamabad: Contrary to the forecast of the Ministry of Finance, the inflation started to decrease rapidly and continued to decline for the third consecutive month and surpassed the government forecasts and the rate came to 20.7 percent in March.
The finance ministry had forecast the rate at around 23.5 percent, beating the government’s expectations by a wide margin and calling into question the central bank’s policy of keeping interest rates at record highs.
According to the Bureau of Statistics, the rate of price increase was 20.7 percent in March compared to the same month last year, which is the lowest rate in the last 22 months. March was the third consecutive month in which the pace of inflation was significantly higher than official estimates. Decreased.
Last week, the finance ministry had forecast inflation to hover around 23.5 percent. The slowdown was more pronounced in urban centers where the pace of price growth slowed significantly. The central bank kept the policy rate at 22 percent, the highest rate since 1972.
It should be noted that the central bank did not cut the interest rate in the last Monetary Policy Committee meeting. It seems that the State Bank is taking dictation from the IMF and not cutting the interest rate, which has a major impact on the business and government treasury. There was an effect.
Pakistan’s economy grew at a pace of only 1 percent during the second quarter of the current fiscal year, while the industrial sector contracted by 0.9 percent. Electricity, gas, petrol, diesel and transport charges kept non-food inflation in double digits.
Gas prices were 318 percent higher than last year, and electricity prices were nearly three-quarters higher than last year.
Last week, the National Electric Power Regulatory Authority increased electricity prices by Rs 2.76 per unit to collect an additional Rs 100 billion including sales tax from consumers. Inflation of food items decreased in cities and rural areas.
According to the Bureau of Statistics, it stood at 16.6 percent in urban centers and slightly above 17 percent in villages and towns. As the exchange rate remains stable, inflation is likely to decrease further in the coming months.
Taking advantage of the increase in demand during Ramadan, the shopkeepers increased the prices of fruits and vegetables. Prices of tomatoes, onions, potatoes, fresh fruits, vegetables, sugar, wheat flour and pulses rose significantly, but cooking oil prices fell last month, with the government and the central bank once again targeting their annual inflation. 21 percent are ready to meet the target.
