Inflation likely to hover around 9.5-10.5% in August

August 30, 2024 (MLN): Inflation is projected to hover around 9.5-10.5% in August and further decline to 9-10%  in September 2024, according to the Finance Ministry's monthly economic report.

At the same time, MG Research estimates show inflation to fall below 10% for the first time in nearly three years.

Pakistan's economy started FY2025 with ?rm positive developments, setting a positive tone for the months ahead.

As of July 2024, a drop in CPI infation suggested that the economy is on track to achieve single-digit inflation in the coming months.

Both the fiscal and external sectors have shown resilience, attributed to improved management.

The current account has improved, and the FBR tax collection exceeded the target.

The LSM sector is projected to sustain positive growth trajectory in FY2025 –on the back of improved external demand, stable exchange rate, receding inflation and easing of monetary policy.

For agricultural outlook, Kharif 2024 production is dependent on the crop's specific weather pattern, which will play a critical role in crop yield.

The recent and ongoing rainfall spells can have positive and negative impact on rice, sugarcane, cotton, fodder and vegetables if the rains do not swept away the farmlands.

On external front, exports, imports and worker's remittances (WRs) are following an upward trend.

For the outlook, it is expected that exports will remain within the range of $2.5-3.2 billion, imports $4.5-5bn and WRs $2.6-3.3bn in August 2024.

The stable outlook of external sector hinges upon stable exchange rate, revived domestic economic activities, better agriculture output, low domestic and global commodity prices and improved foreign demand.

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