In its monthly economic report released Wednesday, the finance ministry predicted that inflation would decrease to 5.8–6.8% in November and subsequently to 5.6–6.5% in December.
In an effort to boost a faltering economy in the face of a significant decline in inflation, the government lowered interest rates by 250 basis points earlier in November.
October’s inflation rate was 7.2 percent, a significant down from May 2023’s multi-decade high of about 40 percent.
According to the data, the consumer price index was 8.7 percent from July to October, compared to 28.5 percent during the same time previous year.
In the meantime, October 2024 had 7.2 percent year-over-year (YoY) inflation, which was far lower than the 26.8 percent reported in October 2023 and 6.9 percent in the preceding month.
Perishable food items (15.9 percent), housing, water, electricity, gas, and fuels (19.2 percent), clothing and footwear (14.6 percent), health (12.3 percent), restaurants and hotels (7.9 percent), alcoholic beverages and tobacco (6.4 percent), and furnishing and household equipment maintenance (5.9 percent) were cited as the major causes of inflation. In contrast, transportation saw a decline of 6.1 percent, and non-perishable food items saw a decrease of 1.5 percent.
According to the report’s economic assessment, initiatives in the industrial and agricultural sectors continued to assist the real sector of the economy.
“On the agriculture front, wheat crop sowing is in progress to achieve the targeted area and production. The government facilitations are well intact regarding the timely provision of key inputs to the farmers at reasonable prices.
“Meanwhile, large scale manufacturing indicators highlight a sector striving to recover. Although YoY growth remains negative, month-on-month performance shows signs of resilience, with gradual production increases in key sectors such as textile and automobiles. Continued policy support and external stability provide a foundation for sustained improvement, suggesting a cautiously optimistic outlook for progressive recovery.”
According to the report, economic activity would be stimulated in the upcoming months by budgetary consolidation and controlled inflation.
It stated: “The current account turned into a surplus during Jul-Oct FY2025, bolstering external sector sustainability” in reference to exports and the current account. According to the projection, worker remittances, imports, and exports are all expected to continue their upward trajectory. In November 2024, worker remittances are expected to be between $2.8 and 3.3 billion, imports will be between $4.5 and 4.9 billion, and exports will remain between $2.5 and $3 billion.
