The Pakistan’s inflation rate has reached a 34-month low in August. The consumer price index (CPI) increased by 9.6% in August compared to the previous year. This is a significant improvement from the previous month’s inflation rate of 11.1%.
In a positive turn for the country’s economy, Pakistan’s inflation rate has dropped to its lowest level in nearly three years. According to the latest data from the Pakistan Bureau of Statistics (PBS), inflation fell to 9.6% in August 2024. It is a significant decrease from 11.1% in July and a remarkable drop from 27.4% in August of last year.
This marks the first time since October 2021 that Pakistan’s inflation has dipped into single digits, providing some relief to citizens who have faced soaring prices in recent years. The monthly rise in the Consumer Price Index (CPI) was also lower, at just 0.4% in August, compared to a 2.1% increase in July.
The drop in inflation is attributed to stabilizing economic conditions and recent policy measures. In July, the State Bank of Pakistan (SBP) reduced the key policy rate by 100 basis points, bringing it down to 19.5%. This move was aimed at easing inflationary pressures and stimulating economic growth.
Urban areas saw an inflation rate of 11.7% in August, while rural areas experienced a lower rate of 6.7%. Despite these decreases, certain food items such as onions, fresh vegetables, and pulse grams saw significant price increases over the year. Non-food items like gas charges and motor vehicle taxes also contributed to inflation, particularly in urban areas.
Further Plans
Prime Minister Shehbaz Sharif expressed satisfaction with the falling inflation rate, noting that global financial institutions. Moody’s, has upgraded Pakistan’s credit rating in response to improving economic conditions. The Prime Minister emphasized that the government remains committed to implementing economic reforms to ensure sustained stability.
Looking ahead, the Ministry of Finance expects inflation to continue its downward trend, with forecasts suggesting it could fall to between 9% and 10% by September. As Pakistan’s economy shows signs of recovery, further interest rate cuts by the SBP could be on the horizon, potentially reducing the policy rate to 14-14.5% by mid-2025.
This news brings hope that Pakistan is on a path to economic recovery, with lower inflation easing the financial burden on households across the country.
