Contradictions arise as Pakistan maintains high interest rates despite consumer woes.

Despite the Ministry of Finance claiming the maintenance of a 22% interest rate due to positive economic signals and improved inflation outlook, the consumer price index (CPI) reveals a stark contrast. A majority in Pakistan faces an unprecedented cost-of-living crisis, with CPI inflation at 26.9% in October 2023. The ministry acknowledges the adverse effects on consumers but points to better fiscal accounts and anticipates remittance recovery in October 2023. The report cites global inflation impacting overseas workers’ incomes, leading to a slowdown, particularly in countries like Bangladesh, India, and the Philippines. Additionally, the impact of tighter monetary policies globally is affecting business and consumer confidence, with a fading rebound in China. Despite challenges, the government’s fiscal expansion aims to achieve a 5.0% growth target for 2023.