Pakistan is going to witness double-digit inflation in the month of April 2021,a s CPI is likely to range upto 11.2% during the month which is the highest level in 13 months. The average inflation for Fiscal Year 2021 will rise to 8.6% . Aveerage Inflation during March-2021, while was recorded at 9.05% while it was 8.55% in April 2020.

This will lead to increased average inflation over a ten-month period. 21 to 8.62%, which is an increase from 11.42% over the same period last year, which is largely in line with the SBP estimate of a 7-9% year / year consumer price index for 21 financial years.

At the same time, Pakistan’s real interest rates are expected to fall further into the negative zone standing around negative 4%.

The rise in inflation is likely to be due to rising food prices each month due to Ramadan and a supply-side problem. The rise in the rental index component of CPI, increase in clothing and footwear will also provide another boost for monthly inflation. Higher electricity tariffs and a lower base for the same month last year will only aggravate the inflationary pressure. After Ramadan, however, food prices have returned to some benchmarks, as historical data show.

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