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Economy

Finance Ministry expect Inflation to average 27 percent in October 2023

October 31, 2023

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According to the Ministry of Finance’s Monthly Economic Update & Outlook, headline inflation for October 2023 is expected to range between 27% to 29%, showing a slight decrease from the 31.4% year-on-year (YoY) figure reported in September 2023. This change is attributed to several factors, including the reduction in petrol and diesel prices, capitalizing on declining global crude rates, and the strengthening of the domestic currency. These developments are anticipated to alleviate inflationary pressures within the country.

Additionally, subnational governments are making efforts to implement lower fares for local public and freight transportation in line with reduced fuel prices. This move is expected to further ease pressure on consumer prices. The report highlights that, considering these factors, inflation is likely to be better contained compared to the elevated levels observed in the first quarter of fiscal year 2024.

Conversely, MG Research’s estimates predict that headline inflation will settle around 26.4-26.5% YoY and 0.7% month-on-month (MoM). Leading brokerage houses, on average, project a figure of 26.39% YoY.

The report also anticipates a positive outlook for overall economic activity in the outgoing fiscal year. This optimism is based on the rebound in domestic economic activities and improvements in inflationary pressures. Furthermore, coordinated efforts by government organizations to address macroeconomic imbalances are expected to lead to stabilization in the coming months and foster sustainable and inclusive economic growth in the medium to long term.