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Pakistan’s annual CPI indicator falls to 20.7% in March, data shows

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KARACHI: Pakistan’s Consumer Price Index (CPI) for March increased by 20.7 percent compared to the same month last year, data from the Pakistan Bureau of Statistics showed on Monday, the highest figure lowest in almost two years and below Finance Ministry projections for the month. .

Compared to the previous month, inflation for March recorded an increase of 1.7 percent.

South Asia’s struggling $350 billion economy has faced inflation above 20% since May 2022, reaching a peak of 38% in May 2023 as it faces controversial reforms that it must implement as part of the International Monetary Fund (IMF) bailout plan. program.

The country has also seen slowing growth, with GDP falling 0.17 percent in fiscal 2023 as economic activity ground to a halt due to a historically high interest rate which currently stands at 22 percent.

In February, annual CPI inflation stood at 23.1 percent, while it remained unchanged from month to month.

The IMF and central bank expect inflation to slow in the final quarter of the current financial year, which ends in June. But the decline in March was stronger than expected.

The Finance Ministry said on Friday that inflation is expected to range between 22.5 percent and 23.5 percent in March, citing the high base effect as well as favorable domestic and global factors.

On Sunday, the government announced another hike in fuel prices, increasing them by 3.5 percent to 289.41 Pakistani rupees ($1.04) per liter (0.26 gallon).

The Finance Ministry said there were signs of growth prospects for the current year.

Calls for a cut in the central bank’s main interest rate are increasing. He left the rate unchanged for six consecutive policy meetings in a bid to boost growth, and said any easing would be based on inflation data.

Pakistan said it would soon approach the IMF again for a longer-term program after reaching a staff-level agreement last month for the second and final review of its nine-month, $3 billion program.

($1 = 278.1000 Pakistani Rupees)

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