Pakistan Expects Inflation Easing Despite Economic Challenges

Pakistan's finance ministry forecasts inflation to ease in July and August. The government has reduced its fiscal deficit substantially. However, tough IMF measures and rising living costs have sparked public concern and protests. Inflation has slowed recently, but economic pressure remains high.

Pakistan's finance ministry expects inflation to range between 12% and 13% in July, with further easing to between 11.0% and 12.0% in August, according to a monthly economic outlook released on Tuesday.

The statistics agency is expected to release the official inflation figures on Thursday, which are closely monitored by the central bank. The bank recently reduced interest rates for the second consecutive time following a period of surging inflation.

Additionally, the government decreased the fiscal deficit to 4.9% of GDP between July 2023 and May 2024, down from 5.5% the previous year. This comes as Pakistan signed a $7 billion loan agreement with the International Monetary Fund, which imposes stringent measures like increased taxes on farm incomes and higher electricity prices.

(With inputs from agencies.)