June 28, 2024 (MLN): Despite higher prices of perishable items during the month, government measures to reduce transport charges are expected to keep June 2024 inflation within the range of 12.5%-13.5%, according to the Monthly Economic Update & Outlook released by the Ministry of Finance on Friday.
"The inflation outlook for June 2024 has slightly increased compared to the previous month but remains well below the levels of the same month last year," the report reads.
This rise is primarily due to higher prices of perishable items driven by Eid ul Adha. In response, the government is implementing various administrative, policy, and relief measures to control inflationary pressures.
Notably, the government reduced petrol prices by Rs4.74 per litre and diesel by Rs3.86 per litre on June 1, with further reductions of Rs10.20 per litre for petrol and Rs2.33 per litre for diesel effective from June 15.
These actions, coupled with efforts to boost the availability of food items, reflect the government's commitment to curbing inflation.
By managing supply and demand, the government aims to stabilize prices and mitigate market volatility, presenting a more optimistic inflation outlook.
Meanwhile, the Food and Agriculture Organization's food price index, a key indicator tracking the prices of globally traded food commodities, registered an increase of 0.9% in May 2024 over the revised April level. This is the third consecutive monthly increase after a seven-month decline.
However, it remained down 3.4% compared to its value from one year ago.
The report further stated that FY2024 is going to end with an economic stabilization path accompanied by improved macroeconomic indicators.
The subsiding inflationary pressures, stability in external accounts and exchange rate, fiscal consolidation and gradual recovery in industrial activities are restoring the confidence of economic agents thus facilitating economic growth.
Going forward, Pakistan's growth prospects are expected to remain encouraging. Budget FY2025 is gearing towards a shift to an era of sustainable and inclusive growth. Aiming to this, the government is focusing on high-potential sectors like IT, SMEs, mines and minerals, tourism, exports and agriculture.
These sectors can pay rich dividends and lend support to the country's balance of payments position.
Complementing this, fiscal discipline, effective implementation of home-grown growth program along with bilateral and multilateral cooperation will necessitate the sustainable potential growth path in coming years.
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Posted on: 2024-06-28T14:40:39+05:00
