Pakistan’s inflation rate in November recorded its lowest level in 6.5 years, standing at 4.9%, according to the Pakistan Bureau of Statistics (PBS). This significant drop marks a steady decline from a staggering 38% peak last year. With the State Bank of Pakistan (SBP) scheduled to review its policy rate on December 16, currently set at 15%, the declining inflation trend could influence upcoming monetary decisions.
Easing Inflation Trends
Year-on-year inflation fell from 7.2% in October to 4.9% in November 2024. Comparatively, in November 2023, the rate stood at a hefty 29.2%. Month-on-month inflation, however, showed a slight 0.5% increase, compared to a 1.2% rise in the previous month.
Topline Securities, a brokerage firm, described November’s inflation rate as the “lowest reading in 78 months.” They reported that inflation during the first five months of FY25 averaged 7.88%, a stark contrast to the 28.62% recorded during the same period last year.
Government’s Economic Measures
Prime Minister Shehbaz Sharif praised the economic team’s efforts, emphasizing that falling inflation reflects their stringent anti-smuggling policies and improved revenue collection. Addressing a federal cabinet meeting, he stated, “Inflation at 4.9% is a 70-month low, a testament to teamwork and divine blessings.”
The prime minister highlighted that declining inflation fosters a favorable environment for growth, benefiting exports, industrial output, employment, and special economic zones (SEZs). He stressed that curbing inflation is critical to reducing poverty and increasing purchasing power. Sharif also expressed optimism that the SBP might reduce the policy rate, helping businesses and households alike.
Read: PTI Revises Death Toll in D-Chowk Clashes to 12, Demands Justice
Rising Prices Despite Overall Decline
Despite the broader reduction in inflation, certain food and non-food items experienced sharp price increases across urban and rural areas.
Urban Price Increases (Year-on-Year)
- Food Items: Pulse Gram (71.94%), Besan (59.13%), Pulse Moong (36.94%), and Fish (27.14%).
- Non-Food Items: Motor Vehicle Tax (168.79%), Footwear (31.88%), and Woolen Readymade Garments (19.10%).
Rural Price Increases (Year-on-Year)
- Food Items: Pulse Gram (69.40%), Besan (53.63%), and Milk Powder (26.62%).
- Non-Food Items: Motor Vehicle Tax (126.61%), Personal Effects (26.75%), and Education (22.96%).
Month-on-Month Price Changes
In urban areas, food prices for tomatoes surged by 26.56%, eggs by 11.83%, and pulse moong by 11.15%. Non-food items like footwear increased by 12.36% and liquified hydrocarbons by 8.95%. In rural areas, similar trends were noted, with significant hikes in tomatoes (26.15%) and potatoes (9.56%).
Outlook and Future Prospects
The continuous decline in inflation boosts economic optimism. With the SBP’s monetary policy meeting approaching, market analysts anticipate a possible reduction in the policy rate. This could stimulate further economic growth, stabilize prices, and enhance public confidence in the government’s economic policies.
Follow us on Google News, Instagram, YouTube, Facebook,Whats App, and TikTok for latest updates
