Pakistan’s Inflation Surges To 29.2 Percent In FY23: Central Bank
ISLAMABAD, Dec 30 (NNN-APP) – Pakistan’s average national consumer price index inflation, surged to 29.2 percent in fiscal year 2023, starting Jul, 2022 to Jun, 2023, higher than the central bank’s revised inflation projection range of 27 percent to 29 percent, the bank said, yesterday.
In the Governor’s Annual Report 2022-23, the State Bank of Pakistan (SBP), said that, the FY23 was extraordinarily challenging, with a host of external and domestic shocks, amplified by lingering structural weaknesses, contributing to high inflation, amid a contraction in economic activities.
While elevated global commodity prices contributed to high inflation out-turns, the pressure on external accounts and ensuing exchange rate depreciation also contributed to inflationary pressures, the bank added.
The year witnessed wide-ranging reverberating impact of the devastating monsoon floods, whereas elevated global commodity prices and less-than-envisioned fiscal consolidation were some of the major contributors that added pressure on the external account, the report said.
The country’s GDP contracted by 0.2 percent, and budgetary targets for the government’s fiscal and primary balances were missed by large margins, amid less-than-planned tax revenues and lower-than-budgeted reduction in subsidies, the report added.
“The SBP responded to these challenges by maintaining a contractionary policy stance, raising the policy rate by a cumulative 825 basis points during FY23, in addition to the 675 basis points increase in FY22,” the report noted.
The central bank said that, it will continue to make decisions to prevent high inflation from becoming entrenched and keep inflation expectations anchored, to achieve the medium-term target of five percent to seven percent by the end of FY25, with FY24 inflation moderating to 20 percent-22 percent.– NNN-APP
