Ministry of Finance forecasts inflation at 27.5-28.5% for December

December 27, 2023 (MLN): CPI Inflation is anticipated to remain around 27.5-28.5% in December 2023 and further ease out to 24-25% in January 2024, the finance ministry said in its monthly economic report on Wednesday.

Inflation outlook for the remaining months of FY2024 is seen at a moderate level despite the upward revision of administered prices (gas prices), it said.

This is on account of a stable exchange rate, contained aggregate demand, better supply position, moderation in the international commodity prices, and favorable base effect.

Moreover, the recent decline in petrol and diesel prices is expected to compensate the inflationary pressure exerted through higher gas prices as the decline in fuel prices has a significant impact on the common man through reduced transportation and production costs.

Efforts of the sub-national governments to implement lower fares of public transport and freight charges in line with the reduced fuel prices would further ease the inflationary pressure.

To note, in November 2023, CPI inflation clocked in at at 29.2% on YoY basis, and 2.7% on monthly basis.

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