Economic Survey 2022-23: Inflationary pressure intensifies amid global headwinds

The government conceded on Thursday average inflation will surpass its budgetary target and remain at 29 per cent for 2022-23 owing to the unprecedented depreciation and rising global commodity prices. According to the Pakistan Economic Survey 2022-23 released on Thursday, the inflation target for the outgoing fiscal year was 11.5pc. Global inflationary pressures have intensified in recent years even though there’s been some improvement in the global supply chain over the last few months. The survey also stated that the international commodity price outlook is favourable and may help offset the negative impact of currency depreciation. Additionally, timely measures leading to a better crop outlook, expected political stability and a stable exchange rate are expected to contribute to price stability. In the medium term, the inflation rate is expected to normalise due to improvements in the agriculture sector and favourable global and domestic conditions. Two factors contributed to inflation in Pakistan. One, as a net importer of food and petroleum products, the rise in crude oil prices due to the global crisis has caused double-digit inflation since November 2021. Two, depreciation has further increased the prices of imported items.