Pakistan has experienced a dramatic decrease in its inflation rate, dropping from 38% to 11.8% over the past year. This significant reduction has been attributed to a combination of stringent monetary policies, fiscal measures, and robust agricultural output.
According to the Pakistan Bureau of Statistics (PBS), the Consumer Price Index (CPI) inflation was recorded at 11.76% in May, down from 17.34% in April. This marks a substantial easing of inflationary pressures within a short period.
The report from PBS detailed various price changes over the past year. Electricity costs surged by 58.7%, transport services by 32.2%, cotton clothing by 23.2%, onions by 86.6%, tomatoes by 55.4%, and spices by 39.17%. Despite these increases, overall inflation trends have moved downward.
On a monthly basis, inflation in May 2024 fell by 3.24%. Urban areas saw a 2.80% decrease, while rural areas experienced a more significant drop of 3.89%. From July to May, the average inflation rate remained at 24.52%.
Interestingly, several essential commodities became cheaper in May. Tomatoes and onions saw a price reduction of 51%, chicken prices fell by 35.2%, and wheat dropped by 22.7%. Liquid fuel prices decreased by 9.4%, electricity charges by 4.5%, and motor fuel by 3.18%. However, the prices of potatoes increased by 14.73%, meat by 4%, and beans by 3.9%.
Topline Securities, an economic research agency, credited the decrease in inflation to strict monetary and fiscal policies. Additionally, record agricultural yields and a stable currency played crucial roles. The agency expressed optimism that the State Bank of Pakistan might soon reduce interest rates to support economic growth.