KARACHI, Pakistan (Reuters) – Pakistan’s inflation slowed in September, with the consumer price index (CPI) rising 23.2% from a year earlier, the statistics bureau said on Saturday.
Prices were down 1.2% from the previous month, the bureau said in a press release. In August, CPI hit a multi-decade high of 27.3% year-on-year.
While the CPI figure remains higher than the annual projection, it is the first drop for months and offers a rare respite for a struggling economy that has been hit hard by historic floods.
Concerns have been rising over Pakistan’s economy as foreign reserves run low, the local currency weakens and inflation soared despite the resumption of an International Monetary Fund (IMF) funding programme in August.
The country has suffered from external shocks stemming from global commodity prices and a rising dollar. Floods in late August killed over 1,500 people and caused billions of dollars of damage, heaping more pressure on its finances.
The year-on-year CPI rise was pushed by increasing prices of food, as well as housing, electricity, gas and fuels. The same two categories contributed to a drop from the previous month.
Pakistan cut fuel prices on Friday by 5% after months of hikes aimed at removing costly subsidies and reintroducing levies to increase government finances as agreed with the IMF.
The finance ministry said that the drop in prices was due to a reduction of petroleum products prices in the international market and with a view to provide relief to the consumers.
Analysts expect the fuel price reduction to further ease inflation, but it is unclear if it has been approved by the IMF, which will take up Pakistan’s next programme review in November.
(Reporting by Syed Raza Hassan; Writing by Gibran Peshimam; Editing by Mike Harrison)
