Islamabad May 29 2024: Inflation in Pakistan is expected to ease to 13.5 to 14.5 percent for May 2024 due to improvement in domestic supply chain of perishable food items and drop in wheat prices, according to Ministry of Finance.
The inflation outlook for May 2024 continues on a downward trajectory, attributed to elevated inflation levels previous year and improvements in domestic supply chain of perishable items, staple food like wheat and reduction in transportation costs.
The government’s commitment to curbing inflation through stringent administrative measures paints a promising picture for the inflation outlook. A key pillar in this strategy is the bolstered availability of food items, which is crucial for taming inflationary pressures. By consistently managing supply and demand, the government stabilizes prices and reduces market volatility. In May 2024, petroleum product prices dropped twice, positively impacting the CPI for the month. Lower fuel prices reduced transportation costs, contributing to this favorable CPI trend. The SPI has recorded a decline for the fourth consecutive week which augur well for CPI outlook.
The Food and Agriculture Organization’s food price index, a key indicator tracking the prices of globally traded food commodities, registered an increase of 0.3 percent in April 2024 over the revised March level. This is the second consecutive monthly increase after a seven-month decline. However, it remained 7.4 percent compared to its value of one year ago.
Inflation is anticipated to remain within the range of 13.5-14.5 percent for May 2024. Nonetheless, there are prospects for a gradual easing, with expectations of a decrease to 12.5-13.5 percent by June 2024.
