ISLAMABAD: Pakistan’s inflation rate has reached its lowest point in over three and a half years, with Consumer Price Index (CPI)-based inflation dropping to 6.9% year-on-year in September 2024.
This notable decrease, the lowest since January 2021, exceeds official forecasts that had expected inflation to remain between 8% and 9% in September and October, according to the Pakistan Bureau of Statistics (PBS).
On a month-to-month basis, inflation fell by 0.5% in September, reversing the 0.4% increase seen in August. The decline from 9.6% in August to 6.9% in September is attributed to several factors, including a high base effect from last year’s elevated prices, a stabilizing exchange rate, and drops in commodity and energy prices.
This reduction in inflation aligns with predictions from analysts who noted that currency stability and easing global commodity prices played significant roles. These trends bolster the case for the State Bank of Pakistan (SBP) to continue easing its monetary policy.
The SBP has already cut its key policy rate by 200 basis points to 17.5% in September, marking the third consecutive reduction since June. Analysts anticipate further interest rate cuts if the disinflationary trend persists, allowing the central bank to foster economic growth while maintaining inflation control.
Meanwhile, Prime Minister Shehbaz Sharif expressed satisfaction over the inflation rate hitting a 44-month low. In a statement, he highlighted that the decline in inflation and continuous drop in petroleum prices are directly benefiting ordinary citizens.
Shehbaz Sharif emphasized that the country’s economy is stabilizing, diplomatic relations are strong, and the journey toward prosperity for the common man has begun. He added that the implementation of the IMF program will further enhance economic stability.
