Pakistan has proposed a GDP (gross domestic product) growth target of 3.5% and an inflation projection of 21% in estimates for its upcoming fiscal year 2023/24 budget, a top official source told Reuters on Tuesday.

Prime Minister Shehbaz Sharif’s government is set to present its annual budget on Friday, at a time when the crisis-hit South Asian country is looking for an International Monetary Fund bailout.

Pakistan’s headline inflation hits new record at 38% in May 2023

The government’s budget estimates suggest authorities are expecting inflation to ease out in the subsequent months after the headline figure hit a record high of 38% in May 2023. The monthly inflation number took 11MFY23 average inflation to 29.2% compared to 11.3% in 11MFY22.

The inflation number for May was also higher than the prediction of Ministry of Finance that said it would be in the range of 34-36%.

In its Monthly Economic Outlook for May, the Ministry of Finance had stated that “the inflation for the month of May 2023 may remain in the range of 34-36%”.

It added that improvement in the global supply chain will ease out domestic prices in the coming months.

Ismail Iqbal Securities Head of Research Fahad Rauf suggested that this is the peak of inflation and the number will likely fall to 30% for June 2023.