Pakistan’s November CPI expected to decline marginally: finance ministry

ISLAMABAD: Pakistan’s November CPI is expected to decline marginally and may remain in the range of 23%-25%, the country’s finance ministry said in its monthly outlook on Tuesday.

The South Asian country’s expenditure grew 26% in the first quarter of the financial year, the ministry said, adding that its fiscal deficit reached 1% of GDP in the same period.

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The outlook said inflationary pressure was expected to ease marginally month-on-month due to smooth domestic supplies, unchanged energy prices in November and a stable exchange rate.

It said the current account deficit declined to $2.8 billion in the first quarter of the current fiscal year, against $5.3 billion in the same period last year.

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The South Asian nation faces a huge economic challenge in the face of devastating floods, which are estimated to have caused more than $30 billion in losses.

The International Monetary Fund (IMF) wants Pakistan to cut expenditure as it conducts the ninth review of a $7 billion bailout programme.

Pakistan and the IMF both have said this week that they have started online talks on the review.

The IMF in August approved the seventh and eights reviews of the bailout programme - agreed in 2019 - to allow the release of more than $1.1 billion.

Pakistan does not face any risk of default, reiterates Ishaq Dar

The ninth review has been pending since September.

The lender has said the finalisation of a floods recovery plan was essential to support discussions and continued financial support from multilateral and bilateral partners.

Pakistan secured a $6 billion bailout in 2019, which was topped up with another $1 billion earlier this year.