Inflation and devaluation

IN December 2023, consumer prices were 29.7 per cent higher compared to December a year earlier. Worse still, every month for more than a year our year-on-year inflation number has been above 20pc. There was however positive news in the recent inflation data too. Prices in December rose by only 0.8pc over November, which was the second smallest monthly increase in a year. And just like November 2023, the increase in prices was only due to the increased cost of gas and electricity — in fact, food prices declined in December. The tight monetary policy being pursued by SBP has finally been able to wring the juice out of our economy and we are going to see inflation and interest rates come down.