Tuesday, July 16, 2024

Pakistan Likely To have higher inflation than bankrupt Sri Lanka this year

While further tightening helps to reanchor inflation expectations, Sri Lanka’s inflation is predicted to drop sharply to 5.5 percent in 2024. Inflation in Pakistan is anticipated to increase from 12.2 percent in 2022 to 27.5 percent this year and 15.0 percent the next year, according to the bank.

The analysis predicts that South Asia’s inflation rate will only drop to 8.1% this year from 8.2% in 2022, with India contributing the most of the dip. Headline inflation in India is forecast to reduce to 5% this year and 4.5 per cent in 2024.

Inflation in Sri Lanka is anticipated to be 24.6 per cent, down from 46.4 per cent last year, due to domestic demand being hampered by fiscal and monetary tightening. While further tightening helps to reanchor inflation expectations, Sri Lanka’s inflation is predicted to drop sharply to 5.5 per cent in 2024.

According to the bank, inflation in Pakistan is anticipated to increase from 12.2 per cent in 2022 to 27.5 per cent this year and 15.0 per cent the following year.

The average inflation in Pakistan during the current fiscal year (FY23) is set to be higher than in Sri Lanka, according to the Asian Development Bank.

The bank in its latest report, “Asian Development Outlook (ADO) April 2023”, said that inflation is expected to remain high in South Asia, driven by Pakistan and Sri Lanka.

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