[ad_1]
KARACHI, Pakistan : Pakistan’s annual inflation clocked in at 29.2 per cent in November, data from the statistics bureau showed on Friday, a slight increase from October but well below a peak of 38.0 per cent in May.
Compared with the previous month, inflation was 2.7 per cent.
The country is embarking on a tricky path to economic recovery under a caretaker government after a $3 billion loan programme approved by the International Monetary Fund in July averted a sovereign debt default.
Measures demanded by the IMF including revising the country’s budget, hiking its policy rate, and increasing electricity and natural gas prices and taxes.
“A 280 per cent increase in gas prices during November has led to a higher CPI headline,” said Amreen Soorani, head of research at JS Global Capital. She said that going forward, the CPI’s trajectory is expected to decline on a year-on-year basis owing to a higher base effect.
“As of now, the projected disinflation trend leads to our 12M forward CPI to average close to 18 per cent, while Policy Rate today is at 22 per cent. Sharper than expected depreciation for the rupee against US$ is a key risk to our projections,” said added.
On Nov. 15, Pakistan reached a staff-level agreement with the IMF on the first review of the bailout, which will unlock $700 million in funding for the country.
The funds to be issued are a second tranche of the bailout, which is subject to an approval from the IMF’s executive board.
Under the bailout deal, the IMF also got Pakistan to raise $1.34 billion in new taxation to meet fiscal adjustments. The measures fueled an all-time high inflation rate of 38 per cent year-on-year in May, the highest in Asia.
[ad_2]
Source link
