The Pakistan Bureau of Statistics (PBS) released data showing a notable decrease in headline inflation, dropping to 20.7 percent year-on-year in March.
Comparison and Milestone
March’s figure is an improvement from February’s 23.1 percent, marking the lowest inflation rate since May 2022 and the first time in over three years that it fell below the policy rate of 22 percent.
Average Inflation and Projections
The average inflation for July to March slightly increased to 27.22 percent, with the government projecting a range of 22.5-23.5 percent for March 2024.
Factors Influencing Inflation
Despite recent petrol price increases and Ramadan, March’s inflation is considered moderate, with the government’s Ramadan relief package expected to mitigate heightened demand during the festival.
Attribution and Global Impact
Moderation in inflation is partly due to the high base effect and global factors, influencing inflation dynamics, as noted by brokerage house Arif Habib Limited (AHL) and IGI Securities.
Future Outlook and Speculation
Experts anticipate inflation to remain below 20 percent in the coming months, fueling speculation about potential monetary policy adjustments.
