Pakistan’s inflation rate slowed to 4.9% year-on-year in November 2024, according to data released by the Pakistan Bureau of Statistics (PBS). This marks a significant decrease from 7.2% in October, representing the lowest level in six-and-a-half years.
On a month-on-month basis, the Consumer Price Index (CPI)-based inflation rose by 0.5% in November, a slowdown from 1.2% in October and 2.7% in November 2023.
The average inflation for the first five months of FY2025 stood at 7.88%, sharply lower than 28.62% in the same period last year, signalling a clear reduction in price pressures.
Topline Securities noted that November’s inflation figure was the lowest in 78 months, dating back to April 2018. The reading was well below official projections, signalling a significant cooling in inflation.
Earlier in November, the finance ministry projected inflation to slow to 5.8% and 6.8%, with expectations for further decline to 5.6% to 6.5% in December.
In response to the cooling inflation, the State Bank of Pakistan (SBP) reduced interest rates by 250 basis points earlier in November to stimulate the economy. The decline in inflation allows the central bank to continue its monetary easing strategy.
CPI for the month of Nov’24 clocked-in at 4.9% YoY (Lowest since Apr’18) compared to 7.2% in Oct’24. This takes 5MFY25 average inflation to 7.9% (5MFY24: 28.6%).#PBS #Inflation #Pakistan #Economy #AHL pic.twitter.com/oxHGJyJELp
— Arif Habib Limited (@ArifHabibLtd) December 2, 2024Since June, the SBP has reduced the benchmark interest rate by 700 basis points, bringing it down to 15% in November. Economists expect further cuts, with the Bloomberg survey predicting a reduction to 13.5% by June 2025.
October’s inflation had dropped to 7.2% from a high of nearly 40% in May 2023. In September 2024, it was slightly higher at 6.9%.
The central bank has said that inflation may continue to ease due to subdued demand and better food supplies. Meanwhile, the International Monetary Fund has forecasted average inflation of 9.5% for 2024.
