CPI inflation falls to 17.3% in April 2024

May 02, 2024 (MLN): The consumer price index (CPI) for April 2024 clocked in at 17.3% YoY, compared to 20.7% YoY in the last month and 36.4% YoY in April 2023, the latest data issued by the Pakistan Bureau of Statistics (PBS) on Thursday showed.

On a monthly basis, CPI fell 0.4% in April 2024 as compared to an increase of 1.7% in the previous month and an increase of 2.4% in April 2023.

The fall in monthly inflation was the first since June 2023, and significantly below the last 12-month average increase of 1.58% MoM.

The inflation figures came in line with the MG Research's expectations, while softer than the Finance Ministry's forecast.

Accordingly, this takes the average yearly inflation of 10MFY24 to 26.0% YoY compared to 28.2% YoY in 10MFY23.

The average core inflation, measured by non-food non-energy, rose 15.6% YoY in April 2024 as compared to an increase of 15.7% YoY in the previous month and an increase of 21.7% YoY in April 2023.

On a monthly basis, average core CPI increased 2.1% in April 2024 as compared to an increase of 0.4% in the previous month and an increase of 2.2% in April 2023.

With the CPI-based inflation rate at 17.3% and the policy rate at 22.0%, the real interest now stands at 4.7%.

Outlook

Continuing the disinflation trend, consumer prices will experience an even sharper downward trend from June onwards due to a high base.

If consumer prices rise an average 0.5% a month going forward, annual inflation will drop to about 6.2% by December.

With a 1% monthly increase, annual inflation will fall to about 12.7% by December.

Meanwhile, with an average monthly increase of 1.35%, which is the last 12-month average, annual inflation will stand at 17.4% by December.

The following chart maps out the yearly inflation trajectory based on monthly inflation rates of 0.5%, 1%, and the last 12-month average of 1.35%

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