Pakistan’s inflation rate eased to 4.9% year-on-year in November 2024, a notable decrease from 7.2% in October, as reported by the Pakistan Bureau of Statistics (PBS) on Monday. This marks the lowest inflation rate in 80 months, dating back to May 2018.

Month-on-Month Inflation and CPI Trends

On a month-on-month basis, the Consumer Price Index (CPI) increased by 0.5% in November, down from 1.2% in October and 2.7% in November 2023.

For the first five months of the fiscal year 2025, the average inflation rate stood at 7.88%, significantly lower than the 28.62% recorded during the same period last year.

SPI Inflation Decline

The Sensitive Price Index (SPI) also showed a decrease in inflation, dropping to 7.3% year-on-year in November 2024, compared to 9.7% in October and 30.6% in November 2023. Month-on-month, SPI inflation rose by 1.0% in November 2024, a slower increase than the 0.6% recorded in October and 3.3% in November 2023.

Economic Improvements and Future Expectations

The ongoing disinflationary trend, largely attributed to improved economic conditions, has raised expectations that the State Bank of Pakistan (SBP) may further reduce its key policy rate. The SBP’s Monetary Policy Committee (MPC) is set to meet on December 16, 2024.

Inflation Peak and Recent Decline

Inflation in Pakistan peaked at an alarming 38% in May 2023, driven by both domestic economic challenges and global pressures. However, the consistent decrease in inflation since then has relieved pressures on consumers and the broader economy, creating space for potential policy changes aimed at supporting economic growth.