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Government Expects Inflation to Rise Further

Inflation may peak at 38% in May, per Ministry of Finance’s update.

The government says that much of the high inflation is expected to be due to rising food and energy prices.

Data from the sensitive price indicator SPI showed that short-term inflation stood at 46.8 percent last week, slightly below the peak of 47.2 percent seen a week ago.

Additionally, the Consumer Price Index recorded its highest monthly inflation rate in March at 35.4 percent.

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The ministry attributed the increase in overall prices to rupee depreciation and increase in administrative costs.

The government has reconstituted a National Price Monitoring Committee headed by the Minister of Planning to monitor prices along with Chief Secretaries of the provinces.

However, the group has only met a few times in the past 12 months. In addition, the Ministry’s assessment indicated that Pakistan’s economy is facing serious challenges, such as high inflation and weak economic growth.

However, some positive indicators are emerging due to the government’s stabilization policies, such as a surplus in the current account of the balance of payments.

The ministry expects the completion of the IMF program to attract more capital inflows, stabilize the exchange rate and reduce inflationary pressures.

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