Inflation to stay at 28.5% despite ‘economic stabilisation’

Two days after the central bank elevated its inflation forecast, the federal government on Wednesday significantly upwardly revised its projection, stating that inflation may remain around 28.5% in January due to food supply shocks. In its flagship monthly economic outlook report, the finance ministry anticipates inflation to be around 27.5%-28.5% in January, a 3.5% increase from the previous forecast made a month ago. This adjustment reflects ground realities, indicating no relief in the prices of essential goods and utility items. The report, prepared by the Economic Advisor Wing of the finance ministry, also suggests that the inflation rate may remain around 27.5% in February. This report follows the central bank’s recent announcement of its monetary policy, which tempered earlier optimism about a sharp decline in inflation in the second half of the fiscal year. Price stability is the central bank’s primary objective under the new autonomy regime, but there is no accountability for missing the goal.