Pakistan is grappling with severe economic and political turmoil that has had a profound impact on the population, despite the persistent efforts of the coalition government to address the situation, as reported by the media.
According to the media report, the Ministry of Finance in Pakistan has cautioned about the challenges stemming from uncertain economic conditions, both domestically and externally. These challenges include elevated inflation rates and the need to repay external debts amidst reduced foreign exchange inflows.
In its monthly outlook bulletin, the ministry predicted that the inflation rate for May would range between 34-36 per cent. The media report quoted the ministry stating, “Pakistan’s economy registered a provisional GDP growth of 0.29 per cent in the fiscal year 2022-23, facing numerous hurdles due to the uncertain external and domestic economic environment.”
The ministry further acknowledged that despite monetary tightening efforts, the persistently high trajectory of the Consumer Price Index (CPI) inflation was primarily driven by rupee depreciation. Additionally, the country faced the burden of external payments due to reduced foreign exchange inflows.
The report anticipated that inflationary pressures observed in April would persist in May. The potential factors contributing to rising prices included flood damages, disruptions in supply chains, macroeconomic imbalances resulting in currency devaluation, and political uncertainties.
However, it was noted that improvements in the global supply chain would eventually alleviate domestic prices in the upcoming months. Global commodity prices witnessed a decline of 14 per cent in the first quarter of 2023, reaching roughly 30 percent below their peak in June 2022 by the end of March.