Pakistan’s inflation rate decreased to lowest

ISLAMABAD: The country’s inflation trajectory has demonstrated a remarkable downward trend, with the rate plummeting to 4.9% in November 2024, marking the lowest level in six and a half years, according to recent economic data.

The inflation rate attributed to initiatives implemented by the Special Investment Facilitation Council (SIFC). During the first five months of the current fiscal year, the average inflation rate has dramatically decreased from 28.62% to 7.88%, indicating major macroeconomic improvements.

On an annual basis, the inflation rate in urban regions has fallen to 5.2 per cent. Urban areas have particularly witnessed a substantial reduction, with the inflation rate stabilizing at 5.2%. Economists attribute this decline to strategic policy interventions and a comprehensive approach to managing consumer price pressures.

Key factors contributing to this economic moderation include reduced food and transportation expenses. The consistent decline in inflation is expected to alleviate financial strain on consumers and create a more stable economic environment.

Policy-level measures have been instrumental in achieving this economic milestone.

Financial experts emphasize that while the current trends are encouraging, continued strategic monetary and fiscal policies will be crucial in maintaining this positive economic momentum.

The State Bank of Pakistan and economic policymakers are likely to closely monitor these developments, potentially adjusting strategies to consolidate the recent gains and foster long-term economic resilience.

Earlier, Pakistan’s Ministry of Finance unveiled ambitious plans to bring down the country’s inflation rate to 7% by 2027.

According to the ministry’s report, the inflation rate is expected to decrease over the next three years.

The report projects that the inflation rate will decrease from 23.4% to 12% in 2025, and then further to 7.5% in 2026. By 2027, the inflation rate is expected to be reduced to 7%.

In addition to reducing inflation, the ministry also projects that the country’s economic growth rate will increase from 3.6% to 5.5% over the next three years. The primary balance is expected to improve from 1.02% to 0.5% of the economy.

The report also outlines plans to reduce the debt-to-GDP ratio, which is expected to decrease from 68.6% in 2025 to 67.8% in 2026, and then to 66.6% in 2027.

On December 2, the core inflation measured by Consumer Price Index (CPI) decelerated further to 4.9 percent during November 2024 as compared to 7.2 percent recorded during October 2024.

According to PBS data, the CPI based inflation during the same month of last year (November 2023) was recorded at 29.2%.

On month-on-month basis, it increased by 0.5% in November 2024 as compared to an increase of 1.2% in the previous month and an increase of 2.7% in November 2023.