ISLAMABAD, December 2, 2024 – Pakistan’s inflation rate has dropped to 4.9% in November 2024, marking the lowest level since April 2018, according to data released by the Pakistan Bureau of Statistics (PBS).
This decrease brings inflation within the central bank’s target range of 5-7%, offering some relief to consumers after months of high price hikes.
The consumer price index (CPI) for November saw a significant decline compared to 7.2% in October 2024 and a staggering 29.2% in November of the previous year.
Market forecasts had predicted a slight drop to 4.7%, with the actual inflation rate coming in slightly higher at 4.9%.
On a monthly basis, the CPI rose by 0.5% in November, a slowdown compared to 1.23% in October and 2.7% in November 2023, reflecting a more moderate increase in prices.
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Despite the overall decline, core inflation, which excludes volatile food and energy prices, remains relatively high. Core inflation rose 8.9% year-on-year (YoY) in November, slightly up from 8.6% in October but a significant improvement from 18.6% in November 2023.
On a monthly basis, core inflation increased by 1.2%, surpassing the 0.6% rise seen in the previous month.
The government had estimated inflation to be between 5.8% and 6.8% for November, with the actual figure falling below the upper end of the forecast range, providing a positive surprise for policymakers.
Inflation in urban areas was recorded at 5.2%, while rural areas saw a slightly lower rate of 4.3%, highlighting the differing economic pressures faced by urban and rural populations.
Despite the overall slowdown in inflation, prices for essential items such as tomatoes, eggs, lentils, moong, honey, and potatoes continued to rise.
In addition, the prices of ghee, butter, dry fruits, fish, and cooking oil have increased, further straining household budgets.
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Prices in other sectors also saw significant hikes, including a 14.37% YoY increase in clothing prices, and 13% and 10.55% rises in healthcare and education costs, respectively.
This highlights the ongoing burden of non-food inflation on consumers.
With the policy rate currently at 15% and CPI-based inflation at 4.86%, the real interest rate stands at 10.14%, offering a positive sign for savers.
The gap between inflation and the policy rate suggests that the central bank’s monetary tightening measures are beginning to ease inflationary pressures.