Pakistan’s headline inflation slowed to 4.9% year-on-year in November 2024, a significant drop from 7.2% in October, according to data released by the Pakistan Bureau of Statistics (PBS) on Monday.
This marks the lowest inflation rate in 80 months or since May 2018.
On a month-on-month basis, the Consumer Price Index (CPI) rose by 0.5% in November, compared to an increase of 1.2% in October and 2.7% in November 2023.
The average inflation rate for the first five months of FY25 stood at 7.88%, sharply lower than the 28.62% recorded during the same period last fiscal year.
The finance ministry, in its November outlook, had forecast inflation to fall within the 5.8%-6.8% range and further decline to 5.6%-6.5% by December.
According to the PBS data, urban inflation dropped to 5.2% year-on-year in November from 9.3% in October and 30.4% in November 2023.
Meanwhile, rural inflation increased slightly to 4.3% year-on-year, compared to 4.2% in October and 27.5% in November last year.
SPI inflation on YoY decreased to 7.3% in November 2024 as compared to 9.7% a month earlier and 30.6% in November 2023. On an MoM basis, it increased by 1.0% in November 2024 as compared to an increase of 0.6% a month earlier and an increase of 3.3% in November 2023.
The disinflationary trend, attributed to improved economic conditions, has heightened expectations of a further reduction in the State Bank of Pakistan’s (SBP) key policy rate. The SBP’s Monetary Policy Committee (MPC) is scheduled to meet on December 16.
In May 2023, inflation in Pakistan peaked at a record 38%, driven by economic challenges and global pressures.
However, consistent declines in CPI since then have eased pressures on consumers and the economy, paving the way for policy adjustments to support growth.
