Islamabad (TDI): The Pakistani central bank received positive signals to reduce interest rates because inflation reached its lowest point in a decade at 2.4% during January 2022.
The Economic Coordination Committee (ECC) showed alarm regarding the growing costs of fundamental food items including sugar along with vegetables and edible oil.
The decrease in inflation during January 2020 became the lowest since November 2015 according to both federal government predictions and independent analyst projections. The central bank policy remains cautiously restrictive because interest rates exceed inflation levels by 9.6%.
The business sector demands financial assistance by seeking discounted energy and operational expenses which would support growth. Multiple businesses will refrain from business expansion until interest rates reach single digits while having stable policies in place.
During the first seven months of the fiscal year inflation averaged 6.5% which was about half of the target at 12%. Present inflation figures indicate a broadened opportunity for central bank rate reduction which creates positive conditions for future economic development.
Urban inflation reduced to 2.4% and rural inflation decreased to 1.9% even though sugar along with vegetable and edible oil prices continue to be concerning.
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The ECC ordered ministries to work together with the National Price Monitoring Committee (NPMC) for establishing sufficient stockpiles of essential goods before Ramazan.
The ECC supports the decrease in the Sensitive Price Index (SPI) although the body wants this decline to create genuine relief for consumers.
Price controls need complete enforcement according to orders from Provincial Price Control Committees which must also stop all types of profiteering activity and stop shortages of basic goods.
Read More: Inflation in Pakistan drops to lowest in 81 Months
The inflationary conditions display positive development yet the ongoing price increases in essential items create substantial difficulties.
The authorities concentrate on stabilizing the economy while simultaneously decreasing interest rates and providing fair access to basic necessities for all citizens.