Inflation may rise due to recent flooding, though the overall economic outlook remains stable, according to the Ministry of Finance’s Monthly Economic Update and Outlook.
Inflation is expected to remain between 3.5 and 4.5 per cent. The report showed that inflation stood at 3 per cent in August and averaged 3.5 per cent during July and August. Economic stability and growth continued in the first two months of the fiscal year.
Despite the severe flooding in July, inflation declined. During the same period, output in major industries improved.
The Ministry of Finance attributed the primary surplus to fiscal discipline, higher revenues, and improved expenditure management. Exports, remittances and foreign exchange reserves are supporting the external sector.
Monetary conditions remain stable, and the bullish trend in the stock market reflected investor confidence, added the ministry.
