Data from the Pakistan Bureau of Statistics (PBS) showed on Monday that the consumer price index (CPI) rose 11.8% in May from a year earlier. This is the lowest reading in 30 months and below the finance ministry’s projections.
The central bank meets next week to review the key rate, which has remained at a historic high of 22% for seven consecutive policy meetings.
Pakistan has faced inflation above 20% since May 2022. Last May, inflation spiked to 38% as the country navigated reforms under an International Monetary Fund bailout programme. However, inflation has slowed since then.
Month-on-month consumer prices fell 3.2%, marking the biggest drop in over two years.
In its monthly economic report released last week, the finance ministry expected inflation to hover between 13.5% and 14.5% in May and ease to 12.5% to 13.5% by June 2024.
“The inflation outlook for May 2024 continues on a downward trajectory,” the report said, attributing this to last year’s elevated inflation levels and improvements in the domestic supply chain of perishable items, staple foods like wheat, and reduced transportation costs.
Amreen Soorani, head of research at JS Global Capital, said the actual readings have come in even lower due to a sharper dip in food prices.
