Pakistan annual inflation declines to 20.7pc in March
Business
It is the lowest reading since May 2022 when the CPI had clocked 13.8pc
- The drop in CPI during the last three months may result in interest rate cuts
- Inflated energy prices may result in a delay by the central bank
ISLAMABAD (Web Desk) – The consumer price Index (CPI) for March witnessed a 20.7 per cent year-on-year increase, which is the lowest inflation reading since May 2022 when it was recorded at 13.8pc, shows the data released by the Pakistan Bureau of Statistics (PBS).
Also, the decrease in March CPI is sharper than what the International Monetary Fund (IMF) and the central bank had projected, as they had said that the inflation would slow in the last quarter of the current financial year.
With the annual inflation recorded at 23.1pc in February, the latest figures are an encouraging sign for the market by giving a hope that the State Bank of Pakistan may opt for much-needed interest rate cuts if the trend continues next month.
But the latest energy tariff hikes as well as the increase in fuel prices could have damaging effects by propelling the input and transportation costs, which may be reflected in food prices.
Read more: Pakistan inflation sees slowest CPI jump in February since June 2022
However, inflation witnessed a 1.7pc jump on month-on-month basis.
The PBS data shows that the urban inflation remained higher when compared with rural inflation. However, the both witnessed a marked decrease in March.
As far as the urban inflation is concerned, the index clocked at 21.9pc which was 24.9 in February. It was much higher – 33.0pc – in March last year.
On the other hand, the annual rural inflation in March stood at 19pc when compared with 20.5 for February. The reading for March 2023 was 38.9pc.
But both urban and rural CPI registered a month-on-month increase – 1.4pc and 2.1pc respectively.
Meanwhile, the annual food inflation in urban areas as shown by the CPI was 16.6pc and 17.1 in the case of rural.
The corresponding figures for non-food items in urban and rural areas on the annual basis were recorded at 25.8pc and 21.0pc respectively.
