Pakistan’s Inflation Drops to 11.8% in May 2024: A Figure of Relief

Inflation in Pakistan, which raced ahead for nearly two years because of the property crisis, gained a slow or tardy pace. This is according to the Pakistan Bureau of Statistics where number 11 has indicated that the CPI of the country has risen. Compared to the same period in the year, May 2024, it was at 8%. This latest figure now dictates the lowest inflation rate figures in South Asia third third-largest economy after 30 months thus offering some relief to the already frustrated Pakistanis end.

Free Fall Before an Important Decision of the Central Bank Key

The lower-than-expected CPI has come a week ahead of the planned amendment to the key interest rate by the central bank, which is presently at 22%, its highest level. After May 2022, foreign currency depreciation and quickening inflation that was as high as 38% in May of 2023. These high inflation rates reflected the fact that the country used to implement reforms once it joined the IMF bailout program.

The PBS data shows that while the general inflation rate went up the consumer price reduced by 3. In May, the quarterly growth was 2 percent month-on-month, while the annual contraction was 0. 4% in the previous month The average variance is equal to 0. 0034. This is the biggest decline in consumer prices recorded in the country in over two years, thus showing that the standard of living of the people in the country has improved.

Inflation Expectations that Governments Have for the Subsequent Fiscal Year

The department of the Financial Ministry of Pakistan recently released the monthly report of inflation where it had estimated that the inflation rate may fall between 13. 5% and 14. 5% in May 2024. However, this projection remains above the current rate, and it shows a decline in the inflation rate over the subsequent one-year period.

The structures of the PBS data revealed raised prices for several items on a month-on-month basis in terms of potatoes, meat, milk powder, pulse grams, plastic products, beverages, beans, eggs, cooking oil, health and transport services, and books.

Year-on-Year Price Changes

When compared to the previous year, several items experienced a significant increase in prices, including gas charges, electricity charges, transport services, onions, tomatoes, condiments, spices, beans, fish, vegetables, and education costs.

However, items whose prices declined compared to the previous year included wheat flour, chicken, cooking oil, fresh fruits, vegetable cooking oil, eggs, and liquified hydrocarbons.

Analysts Perspectives and Expectations

As for the report, local analysts have voiced their hope regarding the inflation rates, saying it is expected consumers and businesses will get some respite. They also noted that the coming central bank meeting along with the ongoing policies will be instrumental in deciding the further course of inflation and hence the stabilization of Pakistan’s economy.