Pakistan Inflation Drops to 6.9% in September 2024, Lowest Since January 2021
Pakistan inflation drops to 6.9% year-on-year in September 2024, the lowest inflation rate since January 2021, according to the Pakistan Bureau of Statistics (PBS). This significant drop, down from 9.6% in August, is attributed to easing global commodity prices, a stable exchange rate, and the impact of tight monetary policies.
Inflation Hits 44-Month Low
The latest data from PBS reveals that inflation decreased by 0.5% month-on-month in September. This sharp drop in inflation surpassed market expectations and official projections, offering relief to Pakistan’s economy.
For more insights on Pakistan’s economic trends, visit our economy section.
Economic Policy and Market Reactions
As Pakistan inflation drops to 6.9%, the country’s central bank, the State Bank of Pakistan (SBP), is expected to further ease its monetary policy. In September, the SBP cut its key policy rate by 200 basis points to 17.5%, the third consecutive reduction since June 2024.
Prime Minister Shehbaz Sharif expressed optimism over the drop, stating on X, “Heartening news for every Pakistani! Inflation is down to 6.9%.” He also mentioned that economic reforms are improving macroeconomic indicators, which is helping stabilize the economy and benefit the public.
Heartening news for every Pakistani!
Inflation is down to 6.9 %
Continued improvement in macro-economic indicators is adding robust momentum to our economy which is poised to further accelerate
‘Ease of Living’ and will bring many positive changes for Common man, as well as…— Shehbaz Sharif (@CMShehbaz) October 1, 2024
For updates on SBP’s policy decisions, check out Ground Zero.
Factors Behind the Inflation Drop
Economists, including Dr. Khaqan Hassan Najeeb, have highlighted several factors leading to this inflation drop. These include a high base effect, falling global commodity prices, and a relatively stable currency. Mohammad Sohail, CEO of Topline Securities, also noted that the SBP’s tight policies brought inflation below 7%—one year ahead of target.
The disinflationary trend is expected to continue in the short term, giving the SBP more room to ease monetary policy. Additionally, the IMF loan agreement remains crucial in keeping Pakistan’s economy stable amid ongoing reforms.
For a detailed analysis, visit Reuters.
