According to statistics released by the Pakistan Bureau of Statistics (PBS) on Monday, the consumer price index (CPI) increased 11.8% in May compared to the same month last year. This was below the finance ministry’s predictions and the lowest reading in thirty months.
A week before the central bank meets to assess the benchmark rate, which has been at a record high of 22% for seven consecutive policy sessions, the lowest number is released.
Since May 2022, Pakistan has seen inflation that is higher than 20%. In May of last year, while the government worked through reforms as part of an IMF bailout package, inflation spiked as high as 38%. But since then, inflation has decreased.
Consumer prices dropped 3.2% month over month, marking the largest decline in over two years.
The finance ministry stated in its monthly economic report last week that it anticipated May 2024 inflation to be between 13.5% and 14.5%, then to drop to 12.5% to 13.5% by June of that same year.
According to the findings, the high levels of inflation in the previous year, as well as improvements in the domestic supply chain for perishable goods and basic foods like wheat, as well as lower transportation costs, are all contributing factors to the inflation prognosis for May 2024, which is expected to continue declining.
Amreen Soorani, head of research at JS Global Capital, stated that the real readings are considerably lower as a result of a more dramatic decline in food costs.
