Pakistan’s headline inflation is expected to remain high at 27.5-28.5% in January 2024, the Finance Division said in its Monthly Economic Update and Outlook released on Wednesday.
“The elevated prices of perishables and vegetables, coupled with increased utility costs (electricity and gas), have contributed to the inflationary pressure,” the outlook read.
According to the monthly report, there has been surge in onion export orders following the Indian ban that strained local supply and increased domestic prices. Specific commodities, such as tomatoes, witnessed price hikes due to supply disruptions caused by severe weather, intensifying the demand-supply gap. Similarly, chicken prices rose due to reduced supply, particularly from controlled sheds experiencing higher input costs.
“However, the government has taken measures to reduce onion export by increasing the minimum export price and also lifted the ban on soyabean import which would ease the supply situation of perishables and chicken,” it said.
Moreover, a decline in fuel cost in January offered a “promising counterbalance”, potentially mitigating the overall impact on consumers and production sectors, the report added.
“Keeping in view the above coupled with the high base effect, inflation is anticipated to remain around 27.5-28.5 percent in January 2024 and further ease out to 26.5-27.5 percent in February 2024.”
