**Inflation, policy rate expected to decline further: Finance Minister Aurangzeb**
Finance Minister Muhammad Aurangzeb on Tuesday expressed optimism over the country’s economic trajectory, stating that inflation and the policy rate are expected to decline further in the coming months as the government's economic reforms begin to bear fruit.
In a press conference held in the capital, Aurangzeb highlighted the coalition government's efforts to stabilise the economy, pointing to a series of structural reforms that have begun to show positive results. "The government has strived hard to bring about economic stability, and these efforts are finally paying off," he said.
The finance minister forecasted a further drop in consumer price inflation, which had already declined to single digits. The Consumer Price Index (CPI)-based inflation dropped to 6.9% year-on-year in September 2024, the lowest since January 2021, down from 9.6% in August. This reduction, according to the Pakistan Bureau of Statistics (PBS), was driven by easing commodity prices, stable energy markets, and a strengthening Pakistani rupee.
Aurangzeb also noted that the State Bank of Pakistan (SBP) had responded to the favourable inflationary trend by reducing its key policy rate. Last month, the central bank's Monetary Policy Committee slashed the rate by 200 basis points to 17.5% from 19.5%, citing a steep fall in both headline and core inflation over the past two months.
He added, “Inflation has dropped to single digits, and we expect it to continue to fall, which will ultimately bring further relief to the public and improve economic conditions.”
Loss of Chinese engineers
In the same briefing, Aurangzeb expressed condolences over the loss of Chinese nationals in a recent attack in Karachi, stating that "no amount of money could be placed on the loss of life." The explosion near Jinnah International Airport on October 6 claimed the lives of three individuals, including two Chinese engineers, while injuring another Chinese national and over a dozen others.
Aurangzeb confirmed that the deceased engineers were working on independent power producers (IPPs) projects, in collaboration with the Minister for Energy (Power Division) Awais Leghari. The engineers were part of ongoing talks with the government of Pakistan to revise IPP agreements to provide further relief to the public.
Economic impact of strikes
Addressing the impact of strikes and protests on the economy, the finance minister expressed concerns over the growing frequency of such activities. "These strikes and agitations are taking a serious toll on the national economy, costing the country approximately Rs190 billion per day and severely hampering economic growth," Aurangzeb stated.
He urged those leading strikes to consider their economic repercussions and seek resolution through dialogue instead. "We invite those with grievances to negotiate and resolve their issues, rather than resorting to disruptive actions that are harmful to the entire nation," he added.
The finance minister reiterated the government's commitment to stabilising the economy and assured that efforts were underway to address the concerns of the public while maintaining the hard-earned economic progress.
