The State Bank of Pakistan (SBP) on Friday said the inflation rate will ease to around 20-22 per cent in the 2024 financial year, according to a report issued weeks ahead of the February 8 general elections.

According to the SBP governor’s annual report on the past fiscal year, the bank will continue to make decisions to prevent high inflation from becoming entrenched.

The report added that the economy missed its fiscal and primary surplus targets in FY23 by a large margin, with real GDP contracting to 0.2pc.

Pakistan experienced its highest-ever inflation in FY23 with the rupee dipping to historic lows until a $3 billion bailout from the International Monetary Fund averted an imminent sovereign default in July.

SBP Governor Jameel Ahmed also said in his report that average inflation, measured by the consumer price index, surged to 29.2pc in FY23, which was around the upper bound of the bank’s revised projections.

Ahmed added that the central bank would keep inflation expectations anchored to achieve its medium-term target of 5-7pc.

Fiscal and policy measures taken before and after the bailout are stabilising the $350bn economy as Pakistan approaches the national election.