Pakistan inflation projected to ease to 20-22% for FY24 – central bank report

KARACHI, Pakistan (Reuters) -Pakistan’s inflation rate will ease to around 20-22% in the 2024 financial year, the central bank governor said on Friday in a report issued weeks ahead of a national election which could help restore political and economic stability to the country.

The bank will continue to take decisions to prevent high inflation from becoming entrenched, it said, adding that Pakistan’s economy missed by a large margin its fiscal and primary surplus targets in FY23, with real GDP contracting to 0.2%.

The country of 241 million people experienced its highest ever inflation in FY23, with its currency dipping to historic lows until a $3 billion IMF bailout averted an imminent sovereign default in July.

Central Bank chief Jameel Ahmed also said in his report that the CPI surged to 29.2% in FY23, which is around the upper bound of the bank;’ revised projections.

Ahmed added that the central bank will keep inflation expectations anchored to achieve its medium term target of 5-7%

Fiscal and policy measures taken prior and after the bailout are stabilising the $350 billion economy as Pakistan approaches a national election on Feb. 8.

The report said fiscal and primary surplus targets for the year were missed by a large margin.

(Reporting by Ariba Shahid and Asif Shahzad in Islamabad; Editing by Alex Richardson and Angus MacSwan)