The Finance Division anticipates a gradual easing of inflation from its November peak of 29.2 percent to a range of 25.5-26.5 percent in December. In its Monthly Update & Outlook for November, the ministry noted a decline in the Food and Agriculture Organization’s food price index in October, reaching the lowest point since March 2021.
Despite this, the report acknowledges that the high base effect domestically may provide only modest relief to inflation in the coming months.
The update highlights expectations that supply pressures on perishable goods will alleviate by the end of November, considering the crop cycle. Additionally, the government’s reduction of fuel prices is anticipated to contribute to further easing inflationary pressures.
Interestingly, the report’s November prediction of inflation remaining low at 26.5-27.5 percent was proven incorrect, as inflation spiked to 29.2 percent during the month. Nevertheless, the report remains optimistic, stating that inflationary pressures are diminishing, and the outlook has improved.
It foresees a decline in inflation in the coming months, attributing this to receding supply constraints and modest demand. The report concludes by anticipating a positive impact on domestic economic activities in the upcoming months.
