Pakistan’s inflation eased for the second straight month in July as the central bank kept policy rates elevated to keep prices in check.
(Bloomberg) — Pakistan’s inflation eased for the second straight month in July as the central bank kept policy rates elevated to keep prices in check.
Consumer prices grew 28.31% in July from a year earlier, according to data released by the Pakistan Bureau of Statistics Tuesday. That compares with a median estimate for a 26.05% surge in a Bloomberg survey and a reading of 29.40% in June.
The print will provide relief for policymakers looking to stabilize Pakistan’s crisis-ridden economy. Inflows from multilateral lenders and friendly nations have averted a default and eased shortages.
The nation’s central bank on Monday held its key rate at a record 22% but pledged further action should prices rise further. The monetary authority has raised rates by 600 basis points so far this year.
Transport prices climbed 13.60% while food inflation rose 39.54% in July from a year earlier, the data showed. Clothing and footwear prices gained 20.36% and housing, water and electricity costs rose 10.84%.
While some inflationary risks are seen building up from tax hikes, higher fuel prices and lifting of import restrictions, Pakistan’s central bank expects average inflation in the range of 20%-22% for the fiscal year ending June 2024.
Consumer prices will continue to drop but see a “more pronounced decline” in the second half of the fiscal year, State Bank of Pakistan Governor Jameel Ahmad told an analyst briefing on Monday.
(Updates with details in fifth and sixth paragraphs.)
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