PM Celebrates as Inflation Hits 44-Month Low in September
ISLAMABAD: Pakistan’s inflation rate has plummeted to a remarkable 6.93% in September 2024, marking the lowest level in 44 months. This milestone represents the second consecutive month of single-digit inflation, a trend not seen since January 2021, according to the Pakistan Bureau of Statistics (PBS).
In August 2024, the Consumer Price Index (CPI) recorded inflation at 9.6%, a significant drop from 31.4% in September 2023. This latest figure is a stark contrast to the historic peak of 38% in May 2023, highlighting a significant turnaround.
The average inflation rate for the first quarter (July-September) of the 2024-25 fiscal year has also decreased to 9.19%, moving away from the double-digit figures that dominated recent years. The International Monetary Fund (IMF) recently endorsed a $7 billion, 37-month Extended Fund Facility (EFF) for Pakistan, projecting inflation to further decline to 9.2% in the current fiscal year, down from 23.4% in FY2024.
Factors contributing to this positive trend include stabilizing commodity prices, enhanced supply chains, and a relatively stable rupee. However, some economists warn that this decline may be partly attributed to the base effect, which compares current inflation rates to last year’s elevated figures. With the CPI-based inflation at 6.93% and the State Bank of Pakistan’s policy rate at 17.5%, the real interest rate has climbed to 10.57%, marking the first positive real interest rate since March 2024 after a lengthy period of negative rates.
