Home Latest News Inflation Hits 30-Month Low of 11.8% in May

Inflation Hits 30-Month Low of 11.8% in May

Industry observers hope decline will lead to cut in policy rate at next meeting of central bank’s Monetary Policy Committee

by Staff Report

File photo

The consumer price index (CPI) inflation rose 11.8% on year-on-year basis in May as compared to 17.3% a month earlier and 38% in May 2023, according to the Pakistan Bureau of Statistics (PBS), which unveiled its monthly review on price indices on Monday.

The 11.8% inflation is the lowest reading recorded in Pakistan in 30 months, as the country has struggled with inflation over 20% since May 2022. It is also lower than the finance ministry’s projections of a range between 13.5-14.5%, and comes ahead of the State Bank of Pakistan (SBP)’s Monetary Policy Committee meeting, which industry observers hope will announce a cut in the policy rate—currently at 22%—to boost business.

According to the PBS, there was “stagflation” on a month-to-month basis in May, as inflation actually decreased to -3.2% in May, compared to a decrease of 0.4% a month earlier and an increase of 1.6% in May 2023. This has primarily been attributed to a decline in food prices, which comprise the largest component of the basket used to measure the CPI.

The PBS data shows that in urban areas, CPI inflation was recorded at 14.3% on year-on-year basis, while it decreased to -2.8% on monthly basis. In rural settings, CPI inflation hit 8.2% in year-on-year basis and decreased to -3.9% on monthly basis.

Related Articles

Leave a Comment