March 2024 saw Pakistan’s Consumer Price Index (CPI) increase by 20.7% from the previous year, a decrease from February’s 23.1% and significantly lower than March 2023’s 35.4%, per the Pakistan Bureau of Statistics (PBS). This rise marked an acceleration in inflation with a 1.7% month-on-month increase, contrasting with the slight 0.03% uptick seen in the previous month and a 3.7% rise in the year-ago period, exceeding market expectations.
For the fiscal year’s first nine months, the average annual inflation reached 27.2%, mirroring the previous year’s data. JS Global analysts noted this as the mildest inflation since May 2022’s 13.8%, marking over three years since CPI-based inflation dipped below the central bank’s main interest rate, now at 22%. This unexpected drop hints at potential interest rate cuts by the central bank, deviating from the government’s anticipated inflation range of 22.5% to 23.5% for March 2024, as outlined in the Ministry of Finance’s recent economic report.
The government’s increase in the Ramadan relief package from Rs7.5 billion to Rs12.5 billion aims to ease the festival’s demand-driven price pressures, alongside the high base effect playing a role in moderating inflation. The report added that global influences significantly impacted this month’s inflation figures. Brokerage firm Arif Habib Limited (AHL) anticipates inflation to hover around 20% year-on-year for March, signalling a continued decrease from February’s 23.1%, according to AHL’s analysis.
 inflation for March 2024, reported by the Pakistan Bureau of Statistics (PBS). Uncover insights into the decrease from last year's figures and the potential implications for future interest rates.){kind=link}