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State Bank of Pakistan (SBP) Governor Jameel Ahmed said that inflation would ease around 20-22% in the financial year 2023-24, weeks ahead of the general elections, which are seen as a major path towards restoring political and economic stability.
In the Governor’s Annual Report 2022-23, he said the inflation target was set on account of contractionary monetary policy’s impact, improvements in domestic supplies, softer non-energy global commodity prices, and the high base effect.
The governor vowed to continue taking decisions to prevent high inflation from becoming entrenched and keeping expectations anchored to achieve the medium-term target of 5-7 % by the end of FY25.
The South Asian nation of 241 million witnessed historic high inflation in FY23, with the Pakistani Rupee falling to a record low against the US dollar, until an International Monetary Fund (IMF) deal helped stave off a sovereign default.
SBP Governor Ahmed noted in the report that Pakistan’s Consumer Price Index (CPI) also jumped to 29.2%, which was around the upper bound of the central bank’s revised projections.
The SBP chief said the FY23 was extraordinarily challenging, with a host of external and domestic shocks, amplified by lingering structural weaknesses, contributing to persistently high inflation amid a contraction in economic activities.
