Falling inflation

The recent decline in the inflation rate has brought about a significant positive impact on the economy. According to data from the Pakistan Bureau of Statistics (PBS), the consumer price index (CPI) in September clocked in at 6.9% against the previous year, and sneaking under the State Bank's inflation target of between 5% and 7% for September 2025. Month-to-month inflation was actually negative, at 0.5%, compared to 0.4% in August.

This decrease in inflation has been attributed to aggressive monetary tightening by the central bank and has been lauded as a significant achievement for the country, as stabilising inflation was a critical requirement before the policy rate could be lowered to attract more investment and encourage economic growth. One of the most immediate and significant impacts of the falling inflation rate is the relief it provides to the general population, especially in terms of household expenditure. After years of enduring high inflation, families can now plan their spending budgets for longer periods, bringing a sense of security and reducing the burden of financial uncertainty. For the poorest citizens, steady prices can make the difference between hungry children and full bellies.

On a broader scale, businesses also benefit from the increased clarity on estimated input costs, which can lead to improved profit margins and better business planning and modeling, including job creation.

It is also worth noting that tough IMF loan conditions will ensure that the government does not get ahead of itself and go overboard in its efforts to stimulate growth through inflationary measures. However, good policymaking should ideally come from within. The government needs to ensure it competently walks the fine line of policymaking while also working towards long-term economic prosperity for the nation.