Inflation to hover around 27-29% in October: Finance Ministry

October 31, 2023 (MLN): The headline inflation will likely hover around 27 to 29% for October 2023 compared to 31.4% YoY in September 2023, the Ministry of Finance said in a Monthly Economic Update & Outlook on Tuesday. 

The report attributed this change in inflation to the drop in petrol and diesel prices, capitalizing on declining global crude rates and a stronger domestic currency.

These developments are expected to mitigate the inflationary pressures in the country.

Moreover, the subsequent efforts of the subnational governments to implement lower fares of local public and freight transportation, in line with the reduced fuel prices, would further relieve stress on consumer prices.

"Taking these factors into account, it is anticipated that inflation will be better contained compared to the elevated levels observed in the first quarter of FY24," the report reads.

On the other hand, the estimations carried out by MG Research revealed that the headline inflation will settle at around 26.4-26.5% YoY and 0.7% MoM.

Meanwhile, the average estimate of leading brokerage houses showed a number of 26.39% YoY. 

The report further anticipated that overall economic activity would remain positive throughout the outgoing fiscal year due to a rebound in domestic economic activities and an improvement in inflationary pressures.

Moreover, recently coordinated efforts by government organizations to address macroeconomic imbalances will be geared towards achieving stabilization in the coming months and realizing sustainable and inclusive economic growth in the medium to long term.

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