Higher-than-expected hike in gas prices boosts inflation: SBP MPC

Islamabad: The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) stated that the higher than expected increase in gas prices has led to inflation in Pakistan.

The State Bank's monetary policy meeting on Tuesday said a larger-than-expected hike in gas prices contributed 3.2 percent to inflation in November 2023, taking it to 29.2 percent year-on-year.

The committee said that the recent decline in global oil prices and better availability of agricultural produce may moderate inflation, although consumer and business inflation expectations have remained subdued in recent months.

According to the committee, the MPC continues to expect headline inflation to decline significantly in the second half of FY-2024 due to subdued aggregate demand, improving supply constraints, moderating global commodity prices and favorable fundamentals.