Inflation in Pakistan slowed significantly to 4.9 percent year-on-year in November 2024, down from 7.2 percent in October, beating official forecasts and reaching the lowest level since 2018. According to the data released by Pakistan Bureau of Statistics (PBS) on Monday. .
Inflation on a month-on-month Consumer Price Index (CPI) basis rose 0.5 percent in November, down from 1.2 percent in October and 2.7 percent in November 2023.
Average inflation for the first five months of FY2025 stood at 7.88 percent, a sharp decline from 28.62 percent recorded during the same period in FY2024, reflecting a marked easing in price pressures.
According to a report by Topline Securities, this is the lowest inflation rate in 78 months since April 2018.
November’s reading also came in well below official forecasts, indicating a significant cooling in price pressures.
Last month, the finance ministry said in its monthly economic report that inflation is expected to remain at 5.8%-6.8% in November, and further at 5.6%-6.5% in December.
“Inflation is expected… [to] Further decline to 5.6% – 6.5% by December 2024,” the finance division said in its monthly economic update and outlook.
The State Bank of Pakistan (SBP) had cut interest rates by 250 basis points in early November to revive the sluggish economy amid a sharp drop in inflation.
Declining inflation is expected to enable the central bank to maintain its pace of monetary easing.
Since June, the SBP has cut its benchmark interest rate by 700 basis points, bringing it to 15 percent last month.
According to a Bloomberg survey, economists expect the key rate to further decline to 13.5 percent by the end of the current fiscal year, June 2025.
Inflation in October fell to 7.2 percent from a multi-decade high of nearly 40 percent in May 2023, compared to slightly higher than 6.9 percent in September 2024, according to PBS data.
The central bank had said that inflation may lose more steam in the next few months due to lower demand and improved food supply. On the other hand, the International Monetary Fund has projected an average increase in consumer prices of 9.5 percent in 2024.