Title: PM hails govt efforts as inflation plummets to two-year low of 17.3%
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Prime Minister Shehbaz Sharif hailed the recent downturn in inflation as a boon for the populace, deeming it a tangible sign of economic progress, as per a statement released by the Prime Minister’s Office on Thursday.
According to the Pakistan Bureau of Statistics (PBS), the pace of price increases decelerated to 17.3% in April compared to the same period the previous year, marking the lowest rate in two years and nearing the point from which prices initially surged.
Moreover, the decline in inflation surpassed projections from the Ministry of Finance, which had estimated a range of 18.5 to 19.5 per cent. This marked the fourth consecutive month of downward trajectory in inflation rates.
Prime Minister Shehbaz attributed these developments to the collective efforts spanning his previous 16-month-long tenure and continuing under the caretaker government.
He was quoted in the statement, saying, “Reduction of inflation is the first goal, with the grace of Allah, people will get more relief in economic activities.”
The recent reduction in petrol prices will also give relief to the people, he said, adding that the prices of oil have come down in the global market. Shehbaz directed provincial governments to ensure reduction in petroleum prices and enforce official food item prices.
Also read: Inflation falls to two-year low of 20.7% in March
“By the grace of Allah, by continuing in this direction, the lives of the people will improve further,” he maintained, adding that his government is leaving no stone unturned in trying to get maximum relief to the people at the earliest.
Notably, food inflation decelerated in both urban and rural areas, with urban centers experiencing a notable slowdown to 11.3 per cent and rural areas dipping below the single-digit mark to 9.7 per cent, according to the PBS.
However, core inflation, excluding energy and food items, marginally increased to 13.1 per cent in urban areas but dropped below 20 per cent in rural regions. This represents an approximate 6 per cent reduction compared to policy rates.
Despite these developments, double-digit price hikes persisted across all commodity groups except for alcoholic beverages, tobacco, and perishable foods. Non-perishable goods saw a single-digit increase at 9.7 per cent, while perishable goods inflation remained below 7 per cent.
The decline in wheat product prices by 10.5 per cent and wheat by 9.7 per cent in April was attributed to sales below the minimum wheat support price of Rs3,900 per 40 kg. However, the decision to allow wheat imports by the caretaker government was criticised for benefiting urban consumers while disadvantaging farmers.
Until the end of May, the private sector imported 3.5 million metric tons of wheat amounting to $1.1 billion.
Despite the overall decrease, the average inflation rate remained slightly below 26 per cent, surpassing the annual inflation target of 21 per cent. The IMF, in response to the slowing inflation rate projected at 12.7 per cent for the next fiscal year, continues to advocate for high interest rates in Pakistan.
(With additional reporting from Shahbaz Rana)
Published Date: 02-May-2024
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