Pakistan’s Consumer Price Index (CPI) inflation has shown remarkable improvement, maintaining a downward trajectory while staying in single digits during the first four months of FY2025. From July to October 2024, the average CPI inflation was recorded at 8.7%, a significant decline compared to the 28.5% observed during the same period last year.
For October 2024, year-on-year inflation stood at 7.2%, slightly higher than September’s 6.9% but drastically lower than the 26.8% recorded in October 2023. This marked improvement reflects effective fiscal and monetary measures aimed at stabilizing prices and alleviating cost-of-living pressures.
Several key sectors contributed to inflation during this period. Perishable food items saw a notable price increase of 15.9%, while Housing, Water, Electricity, Gas, and Fuels surged by 19.2%. Other contributors included Clothing and Footwear (14.6%), Health (12.3%), Restaurants and Hotels (7.9%), Alcoholic Beverages and Tobacco (6.4%), and Furnishing and Household Equipment Maintenance (5.9%). Conversely, transportation costs decreased significantly, with a 6.1% drop, and non-perishable food items saw a modest reduction of 1.5%.
The Sensitive Price Indicator (SPI), which tracks essential consumer items weekly, reported a 0.55% increase for the week ending November 14, 2024. Out of 51 monitored items, prices for six items declined, 21 remained stable, and 24 experienced increases, reflecting a mixed trend in short-term price movements.
The sharp decline in inflation compared to last year signals improvements in economic management, including supply chain stabilization and reduced input costs. However, the upward trend in certain essential categories like energy and food highlights persistent vulnerabilities that require targeted interventions.
Economic analysts view the downward inflation trend as a positive development for the broader economy. It reduces pressure on household budgets and creates room for more accommodative monetary policies to stimulate growth. With inflation easing, businesses and consumers alike can expect better purchasing power, supporting economic recovery.
Looking ahead, continued efforts to control inflationary pressures, particularly in food and energy sectors, will be crucial for maintaining economic stability. Policymakers must also ensure consistent availability of essential commodities and address any supply disruptions that could undermine price stability.
The government’s ability to sustain this positive momentum will depend on its commitment to structural reforms and prudent fiscal management. With inflation stabilizing, Pakistan can focus on fostering growth and improving the standard of living for its citizens in FY2025 and beyond.