Pakistan’s Inflation Rate Declines to 9.6%,
August annual CPI figures down from 27.4% this time last year and 11.1% in July
Islamabad/Karachi-(Staff Reporter)-Pakistan’s Annual Inflation Rate Slows to 9.6%, Entering Single-Digit Territory for the First Time in Almost Three Years
The Pakistan Bureau of Statistics (PBS) announced on Monday that the country’s annual consumer price inflation rate slowed to 9.6% in August, marking the first single-digit reading in almost three years. This decline is a significant indicator of the country’s improving economic conditions.
Inflationary Pressures Easing
The Consumer Price Index (CPI) decelerated further to 9.6% year-on-year in August, down from the previous month’s 11.1%. This downward trend is a welcome respite for the economy, which had been battling with inflation topping 20% since May 2022. The inflation rate had peaked at a staggering 38% last May, coinciding with the implementation of reforms under the International Monetary Fund (IMF) bailout program.
Prime Minister Shehbaz Sharif expressed satisfaction over the “nosediving of inflation rate” in the country and the upgradation of credit rankings by international financial institutions, including Fitch and Moody’s. The Ministry of Finance’s monthly outlook report had predicted that inflation would remain within the range of 9.5-10.5% in August and further decline to 9-10% in September.
Moody’s Ratings Upgrade
Moody’s Ratings upgraded Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to Caa2 from Caa3, citing improvement in macroeconomic conditions. This upgrade reflects the country’s progress in stabilizing its economy and implementing reforms.
CPI Inflation Trends
The PBS reported that CPI general inflation increased to 9.6% on a year-on-year basis in August 2024, compared to an increase of 11.1% in the previous month and 27.4% in August 2023. On a month-on-month basis, it increased to 0.4% in August 2024, compared to an increase of 2.1% in the previous month and 1.7% in August 2023.
Urban and Rural Inflation
CPI inflation in urban areas increased to 11.7% on a year-on-year basis, compared to an increase of 13.2% in the previous month and 25.0% in August 2023. In rural areas, CPI inflation increased to 6.7% on a year-on-year basis, compared to an increase of 8.1% in the previous month and 30.9% in August 2023.
Sensitive Price Indicator (SPI) Inflation
The SPI inflation increased to 10.8% on a year-on-year basis in August 2024, compared to an increase of 15.7% a month earlier and 27.9% in August 2023. On a month-on-month basis, it decreased to 0.3% in August 2024, compared to an increase of 2.0% a month earlier and an increase of 4.1% in August 2023.
Inflation Rate Decline a Positive Sign for Pakistan’s Economy: PM
Price Increases
The PBS reported price increases in various food and non-food items on a month-on-month and year-on-year basis. Food items like onions, chicken, eggs, and fresh vegetables saw significant price increases, while non-food items like motor vehicle tax, stationery, and drugs and medicines also saw price hikes.
Pakistan’s entry into single-digit inflation territory is a positive sign for the economy, indicating that the government’s efforts to stabilize the economy are bearing fruit. The upgradation of credit rankings by international financial institutions further reinforces this trend. However, the government must continue to implement policies to sustain this momentum and ensure that the economy remains on a growth trajectory.
