November CPI inflation drops to 4.9%, lowest in 6.5 years

Pakistan’s inflation drops to 4.9% in November, the lowest in six years, boosting hopes for more rate cuts.

Pakistan’s annual consumer inflation rate dropped to 4.9% in November 2024, marking the lowest level in six years, according to the figures shared by Pakistan Bureau of Statistics (PBS).

The figure represents a sharp decrease from 7.2% in October and a steep decline from 29.2% in November 2023. This drop in inflation follows months of easing since the historic high of 38% last year.

The decline was primarily driven by lower food and transport costs. The latest data from the Pakistan Bureau of Statistics (PBS) also showed a 0.5% increase in inflation month-on-month (MoM) for November, compared to a 1.2% rise in the previous month.

Food prices in both urban and rural areas showed mixed trends. In urban areas, food items such as tomatoes, eggs, pulse moong, and potatoes saw significant increases, while rural areas saw price hikes in tomatoes, eggs, pulse moong, and cooking oil. Non-food items, including footwear and personal services, also registered price increases.

Looking ahead, inflation is expected to remain subdued due to the high base effect and a stable exchange rate.

This easing of inflation further strengthens the likelihood of the State Bank of Pakistan (SBP) implementing another rate cut at its upcoming meeting on December 16, 2024.

The central bank had previously held off on aggressive easing to maintain macroeconomic stability and reach its medium-term target of 5% to 7% inflation by September 2025.