Economic Stability
ISLAMABAD: Prime Minister Shehbaz Sharif has expressed his satisfaction with the significant decrease in the country’s inflation rate, attributing the positive trend to the dedicated efforts of the government’s financial team.
In a statement released on Sunday, the Prime Minister highlighted the recent data from the Pakistan Bureau of Statistics (PBS), which shows that the Consumer Price Index (CPI) dropped to a record low in July 2024. This decline brought the inflation rate down to 11%, with further reductions anticipated in September.
The Ministry of Finance’s monthly outlook report supports this optimism, forecasting that inflation will likely remain within the range of 9.5-10.5% for August, with a potential further decline to 9-10% in September.
This positive economic shift has been bolstered by recent upgrades from global rating agencies. Following an upgrade from Fitch, Moody’s has also raised Pakistan’s credit rating from Caa3 to Caa2, recognizing the country’s improved economic indicators and stability.
In addition to these improvements, the Prime Minister emphasized the government’s ongoing economic reform policies, including the rightsizing measures that he is personally overseeing.
He expressed confidence that these reforms would soon yield visible benefits for the economy.
Furthermore, the government has taken steps to provide relief to electricity consumers by announcing a reduction of Rs14 per unit in electricity tariffs for August and September, aimed at easing the financial burden on consumers using 201 to 500 units per month.
Additionally, the prices of petroleum products have been lowered, contributing further to the relief efforts.
The PML-N-led government has also made efforts to ensure that the benefits of these policies are directly passed on to the public. The Prime Minister reiterated the government’s commitment to addressing public concerns and working tirelessly to resolve them.
Earlier in August, Moody’s Ratings upgraded Pakistan’s local and foreign currency issuer and senior unsecured debt ratings, reflecting improved macroeconomic conditions.
The upgrade also included a revision of the outlook for Pakistan from stable to positive, following the sovereign’s staff-level agreement with the International Monetary Fund (IMF) for a 37-month Extended Fund Facility (EFF) of $7 billion.
The IMF’s endorsement of this loan program is crucial for Pakistan’s economic recovery.
Despite some concerns about the approval process, Finance Minister Aurangzeb has expressed confidence that the IMF will approve the bailout package in the coming month.
The agreement, which is subject to the IMF’s Executive Board approval and confirmation of necessary financing assurances, is expected to play a significant role in stabilizing Pakistan’s economy.
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