LAHORE (Dunya News) - Pakistan’s Consumer Price Index (CPI) inflation dropped to 6.9 on an year-on-year basis in September 2024 - the lowest since January 2021 - down from 9.6 per cent in August.
It is driven by the high base effect, easing commodity and energy markets, and a stable currency, according to the Pakistan Bureau of Statistics (PBS).
The PBS data, issued on Tuesday, showed that on a month-on-month basis, inflation went down by 0.5 per cent in September as against an increase of 0.4 per cent in the previous month.
The country's annual consumer price inflation rate came down to 9.6 per cent in August, the first single-digit reading in almost three years, which analysts have widely pinned on the fact that the currency has remained stable over the past 12 months.
The inflation figures significantly outperformed both market expectations and official consensus as the finance ministry's last monthly economic outlook had projected inflation to slow to around 8-9 per cent in the next two months (September-October).
This drop makes the case for a further easing of monetary policy by the central bank even stronger. The State Bank of Pakistan cut its key policy rate by 200 basis points to 17.5 per cent last month, making it the third straight reduction since June as the country looks to spur growth as inflation eases.
"Due to aggressive monetary tightening, SBP (State Bank of Pakistan) has achieved in bringing inflation below 7pc one year ahead of target," said Mohammad Sohail, chief executive officer at brokerage Topline Securities.
According to analysts as disinflation is anticipated to lose more steam down the line, mainly on the back of high base effect and dropping global commodities, the SBP will have room to keep lowering the policy rate.