Pakistan finance ministry warns of higher inflation

Islamabad [Pakistan], October 29 (ANI): Pakistan's ministry of finance has warned that the exchange rate, commodity supplies and seasonality could intensify the magnitude of prices and transportation costs in the country, local news reported.
Citing the statement of Pakistan's Economic Adviser's Wing of the ministry of finance, Dawn reported that the country recorded the fiscal deficit during the first two months of the current fiscal year unchanged at 0.9 per cent of GDP.
"The effect of these impulses -- surge in international oil prices, exchange rate depreciation and adjustments in administered prices -- may intensify the magnitude of prices and transportation cost," the EAW said in its monthly Economic Update and Outlook.
The ministry said that an unprecedented increase in international commodity prices was putting pressure on domestic prices as well as on the local currency, Dawn reported.
It added that the country's inflation rate was mainly driven by monetary and supply-side factors, including domestic and international commodity prices, dollar exchange rate, seasonal factors and economic agents' expectations concerning the future developments of these indicators.
According to the EAW statement, "the inflation rate in October is expected to settle below the level observed in September, but the probability range is wide."
According to the report, the fiscal deficit in July-August FY22 was recorded at 0.9 per cent of GDP, the same as in the comparable period last year.
Inflation in Pakistan has reached the highest level in the past 70 years, which has led to protests by the opposition parties and the common man. The inflation in the country broke the record of 70 years in the last three years, with food prices doubling, while the prices of ghee, oil, sugar, flour and poultry have reached high levels, reported The News International. (ANI)