Pakistan’s consumer price inflation slows to 23.8%
7:14 am Thursday, December 01st, 2022
By Asif Shahzad
ISLAMABAD (Reuters) -Pakistan’s annual consumer price inflation slowed to 23.8% in November from 26.6% a month earlier, the statistics bureau said on Thursday, days after the central bank unexpectedly hiked policy rates.
Prices were up 0.8% in November from the previous month, the bureau said in a statement.
Core inflation for urban and rural areas measured by non-food, non-energy increased to 14.6% and 18.5% respectively in November, year-on-year, the bureau added.
Pakistan’s finance ministry said in its monthly outlook released earlier this week that inflation would decline marginally in November, while staying in a range of 23%-25%.
On Nov. 25, the central bank hiked its policy rate by 100 basis points to 16%, the highest in several years, as it sought to prevent inflation from becoming entrenched.
The South Asian nation, which is reeling from devastating floods that are estimated to have caused over $30 billion of damage, has been facing a balance of payments crisis with fast depleting foreign reserves and a widening current account deficit.
With the reserves down to hardly one month of imports, Pakistan desperately needs bilateral and multilateral external financing as it awaits the 9th review of a $7 billion bailout package from the International Monetary Fund (IMF), pending since September.
Both Pakistan and the IMF said last week that pre-review talks had begun online.
The IMF approved the seventh and eighth reviews together in August for the bailout programme agreed in 2019, to allow the release of over $1.1 billion.
The lender wants Pakistan to cut expenditure and says the finalisation of a recovery plan from the floods is essential to support discussions and continued financial support from multilateral and bilateral partners.
Pakistan this week also sought help from the Bank of China for macroeconomic stability.
(Additional Reporting by Gibran Peshimam in Islamabad and Shivam Patel in New Delhi; Editing by Simon Camero-Moore and Elaine Hardcastle)
