We expect headline inflation to be 10.5% in July ’24, a significant decline from the 12.6% YoY inflation rate reported in June ’24.

The Jul’24 inflation figure provides an early indication of the impact of the Budget FY25 measures.

While headline inflation shows a significant YoY decline, monthly pressures remain due to higher food prices, the impact of budgetary measures, and high international oil prices.

A significant decrease in headline inflation compared to the same period last year is anticipated. In July ’23, the inflation rate stood at 28.3% YoY.

Despite the YoY decline, monthly inflationary pressures are projected to persist in Jul’24, with an expected increase of 1.5% MoM. Key indices contributing to this trend include the food index, which is expected to rise by 2.2% MoM due to increasing prices of wheat, chicken, powdered milk, tomatoes, and pulses. The housing index is anticipated to increase by 1.5% MoM, driven by quarterly rent adjustment and higher cement prices. Additionally, the transport index is projected to rise by 2.2% MoM, attributed to an increase in domestic petroleum product prices.

Courtesy – AHL Research