Spokesman Report

ISLAMABAD: The Federation of Pakistan Chambers of Commerce & Industry’s (FPCCI) Presidential Candidate for 2024 election Muhammad Ali Sheikh has said that the most serious challenge to the economy in the current fiscal year would be inflation, because it is already hitting economy due to continuous raise in oil prices and depreciation of local currency.

Muhammad Ali Sheikh warned the high cost of doing business has been hurting the economic growth, as the inflation rate bounced back to 29.2% in concluding month, hurting the trade and industry the most, who faced the brunt of a staggering 520% increase in gas prices.

Quoting the Pakistan Bureau of Statistics, he said that the Consumer Price Index (CPI) surged to 29.2% last month compared to a year ago. The increase was more than market expectations and has lessened the prospects for a cut in the interest rates, which stand at the country’s highest ever level of 22%.

This reading, the first announced by the PBS after the recently concluded International Monetary Fund (IMF) talks, in which the global lender also cut the inflation forecast for Pakistan to 22.8%, may strengthen the IMF’s view of keeping the policy rate unchanged until core inflation starts easing out when the Monetary Policy Committee (MPC) meets on December 12th.

The IMF has released its executive board meetings’ calendar till December 11th, and Pakistan’s case has not yet been listed for the approval of the second loan tranche of $700 million. This may make it difficult for the central bank to cut the interest rate before the board meeting.