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- CPI inflation (General) was 28.3 per cent on a year-on-year basis.
- Headline inflation increased 3.5% in July 2023 on a monthly basis.
- Latest fuel price hike could trigger a fresh rise in inflation in August.
The Consumer Price Index (CPI) based inflation came down for the second month in a row in July, according to data released by the Pakistan Bureau of Statistics (PBS) on Tuesday.
The CPI inflation (General) was 28.3% on a year-on-year basis in July 2023 compared to 29.4% in the previous month and 24.9% in July 2022, the data showed.
On a month-on-month basis, the headline inflation increased 3.5% in July 2023 compared to a decrease of 0.3% in the previous month, the PBS said attributing the increase to food prices.
Inflation hit a record 38% in May but the State Bank of Pakistan (SBP) a day earlier decided to keep the key interest rate unchanged at 22% in view of declining inflation.
The Monetary Policy Committee (MPC) particularly noted that year-on-year inflation is likely to remain on a downward path over the next 12 months, which implies a significant level of positive real interest rate.
Years of financial mismanagement have pushed Pakistan´s economy to the limit, exacerbated by the COVID-19 pandemic, a global energy crisis and record floods that submerged a third of the country last year.
But Islamabad struck a $3 billion standby deal with the International Monetary Fund (IMF) last month that could provide temporary relief for the country´s ballooning foreign debt.
The deal forces the government to scrap a range of subsidies that help the poor but the fuel price hike is largely in line with a rise in oil globally.
The latest fuel price hike announced earlier today could trigger a fresh rise in inflation in August.
Finance Minister Ishaq Dar announced a massive more than Rs19 per litre increase in the price of petrol and diesel, which he said was done in line with the IMF demands.
— With additional input from AFP
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