KARACHI: Pakistan’s consumer inflation in October was 26.9 percent year-on-year compared with 31.4 percent in September, statistics bureau data showed on Wednesday, as it awaits its first review following a loan from the International Monetary Fund (IMF).
Pakistan is embarking on a tricky path to economic recovery under a caretaker government after a $3 billion loan program approved by the IMF in July averted a sovereign debt default, but with conditions that complicated efforts to rein in inflation.
On a month-on-month basis, inflation climbed to 1.08 percent in October, compared with an increase of 2 percent in September.
This brings the average inflation rate for the fiscal year (July-Oct) to 28.48 percent, against a target of 21 percent for this fiscal year. Inflation has been in double digits since November 2021.
Reforms required for the IMF bailout, including an easing of import restrictions and a demand that subsidies be removed, have already fueled annual inflation, which rose to a record 38.0 percent in May. Interest rates have also risen to their highest at 22 percent.
However, some respite came in the form of fuel price cuts and a price-control mechanism announced in October, that caretaker Prime Minister Anwaar ul Haq Kakar said would limit inflation.
Pakistan is being governed by a caretaker administration in the run-up to a general election expected in January.
Analysts say inflation has come down because of lower domestic food and fuel prices and a stronger rupee.
“On a month on month basis, inflation has slowed down to 1.08 percent versus the last three months averaging 2.4 percent,” said Mohammad Sohail, CEO of Topline Securities.
Economic analyst Adnan Sheikh said: “Going forward, risks will persist regarding international oil prices amid Middle East tensions along with balance of payment management.”