Islamabad, October 1, 2024 – Pakistan’s Consumer Price Index (CPI) has dropped to 6.9% year-on-year in September, marking the lowest inflation rate in 44 months. This decline brings relief to consumers and businesses following prolonged inflationary pressures that have impacted household budgets and production costs.
Several factors have contributed to this disinflationary trend. A high base effect from last year’s soaring inflation has made current price increases appear more moderate. Global commodity prices, particularly for food and energy, have also declined significantly in recent months, easing inflationary pressures. Additionally, the stabilization of the Pakistani rupee against major currencies has helped curb imported inflation, aided by central bank interventions and improved fiscal management.
With this sharp decline in inflation, the State Bank of Pakistan (SBP) is expected to further cut its key policy rate. The central bank has already slashed the rate by 450 basis points since July 2024 in response to the falling inflation, signalling a shift towards a more growth-oriented monetary policy.
Economists believe this downward trend in inflation could provide a crucial opportunity for the SBP to boost economic activity, which has been sluggish in recent quarters. However, they caution that external factors such as global oil prices and geopolitical tensions could still disrupt the current stability.
As Pakistan enjoys this inflationary relief, policymakers are urged to consolidate these gains to ensure long-term economic resilience and growth.
