Pakistan inflation down more than expected

Pakistan’s inflation pace eased for the fifth straight month as domestic food supplies improved, and fuel costs fell at a time when the central bank has kept interest rates at a record for nearly a year, Bloomberg reported on Monday.

Consumer prices in May rose 11.76 percent from a year, according to data released by the Pakistan Bureau of Statistics on Monday. It exceeded a median estimate for a 13.7 percent gain in a Bloomberg survey and compares with 17.34 percent increase in April.

The slowing pace of price gains in Pakistan is in part due to the base effect of one of the fastest inflation gains in Asia last year. The central bank has kept interest rates at a record 22 percent since June last year to rein in prices and demand. It will review monetary policy on 10th June and has pledged to bring down interest rates to 5 percent-7 percent by late next year.

Supplies of food staples including flour, sugar and vegetables have increased due to new crops and increased production. The government has brought down gasoline prices by 7.1 percent last month, coming closer to December levels.

The latest data from the statistics bureau showed food costs fall 0.17 percent in May from a year ago compared with decrease of 7.83 percent last month. Transport prices climbed 10.41 per cent, while housing costs increased by 33 percent.

WAM