The country has been struggling with soaring inflation, which last May hit an all-time high of 38% on an annual basis, partly driven by new taxation measures the government imposed to comply with International Monetary Fund demands. Islamabad’s funding agreement with the IMF expires on April 11.

On a month-on-month basis the February CPI was unchanged, having risen every month since the fiscal year began last July.

Pakistan’s finance ministry projected in a monthly report on Thursday that inflation would hover around 24.5%-25.5% in February, with expectations of further easing to 23.5%-24.5% in March as the crop situation and the supply of commodities improves.

The annual CPI for January had clocked in at 28.3%. February’s improvement on that was partly due to base effects.

“The high base effect was expected to kick in this month, which is now visible in the CPI. But the breather this month is also driven by a drop in food prices, despite higher gas and petrol prices this month,” said Amreen Soorani, head of research at JS Global Capital.

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Samiullah Tariq, head of research at Pak Kuwait Investment company, said the impact of a recent rise in utility prices was also waning, supporting the slower pace of inflation.

In January, Pakistan’s central bank held its benchmark interest rate at 22% for the fifth policy-setting meeting in a row and raised its full-year inflation projections.

The governor of the State Bank of Pakistan said the rise in its average inflation forecast for the fiscal year ending in June to 23%-25% from a previous projection of 20%-22% was due to increasing gas and electricity prices.