Islamabad: Ministry of Finance said high inflation remained persist in month of May. However, improvement in global supply chain will ease out domestic prices in coming months. In its ‘Monthly Economic Update and Outlook’, Ministry said inflationary pressure in May 2023 was expected to continue as observed in month of April.

“Potential reasons for rising price level are flood damages, disruptions in supply chains, devaluation brought by macro-economic imbalances and political uncertainty. “Inflation for month of May 2023 remained in range of 34-36 percent,” said Ministry.

Consumer Price Index (CPI)-based inflation clocked in at record high of 36.4 percent on year-on-year basis in April 2023 compared to an increase of 35.4 percent in previous month and 13.4 percent in April 2022. However, Ministry of Finance was of view that favourable international commodity price outlook is expected to offset negative impact of currency depreciation. “In addition, better crop outlook due to timely measures and expected political stability would help to achieve price stability.

Moreover, “Recent decrease in administered prices of petrol and diesel prices will be transmitted into lower domestic prices of essential items by impacting transportation cost,” it added.

During month of May, remittances decreased by 12.9 percent on MoM basis. “It returned to normal trend after observing spike in month of March due to Eid-related factors. It is expected that remittances will increase in coming months due to Eid and other improvements in global and domestic environment,” said report.

Published in The Daily National Courier, May, 31 2023

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