Inflation declines to 8.8pc in April.

Byline: Imran Ali Kundi

ISLAMABAD -- Inflation rate was recorded at 8.8 percent in April due to the impact of rupee devaluation and increase in energy costs.

Inflation slightly declined to 8.8 percent in April after touching five years highest level of 9.41 percent last month (March). Inflation remained at higher side mainly due to the impact of the incumbent government's economic policies including devaluing the currency, increasing gas and electricity prices and massive borrowing from the central bank. Over the past few months, prices of fresh vegetables, fruits and meat have posted persistent increase in major urban centres.

According to the latest data of Pakistan Bureau of Statistics (PBS), inflation increased by 1.3 percent in April 2019 on month-on-month basis, as compared to an increase of 1.4 percent in the previous month. The State Bank of Pakistan (SBP) had projected that headline CPI inflation is projected to fall in the range of 6.5 to 7.5 percent for ongoing fiscal year as against the government's target of 6 percent.

However, the independent economists believed that inflation may touch double digits in the months to come due to the increase in oil prices in international market and possible revenue generation measures, which International Monetary Fund (IMF) would direct for the new loan programme. According to the some reports, the IMF is asking Pakistan to impose new taxes worth of Rs500 to Rs600 billion in annual budget for next fiscal year to increase the revenue generation of the country. These revenue generation measures would push the inflation rate to double digits.

On the other hand, the government has withheld the increase in prices of oil products for the time being. The federal cabinet had referred the matter of increasing oil prices to Economic Coordination Committee (ECC), which would review it in today's (Friday) meeting. The Oil and Gas Regulatory Authority (Ogra) has recommended an increase of Rs14.37 per litre in the price of petrol and Rs4.89 per litre in the price of High Speed Diesel for the month of May. The prices, if ECC approves to increase, would impact the inflation rate.

According to the PBS data, the CPI based inflation was recorded at 7 percent during first ten months (July to April) of...