Pakistan’s inflation has reached its lowest level in 2.5 years, offering a reprieve to the nation’s economy. According to the Pakistan Bureau of Statistics (PBS), the Consumer Price Index (CPI) based inflation slowed to 11.8 percent in May 2024, a significant decrease from 17.3 percent in the previous month and 38 percent in May 2023. This notable decline is the lowest since November 2021.
Pakistan’s Inflation Sees Major Drop
In May 2024, Pakistan’s inflation rate showed a marked improvement. The year-on-year CPI inflation rate fell to 11.8 percent, down from 17.3 percent in April 2024 and a staggering 38 percent in May 2023. This decrease also influenced the average inflation rate for the first eleven months of FY24, which now stands at 24.5 percent compared to 29.2 percent during the same period in FY23.
Urban areas experienced an inflation rate of 14.3 percent year-on-year in May 2024, a drop from 19.4 percent the previous month and 35.1 percent in May 2023. On a month-on-month basis, urban inflation decreased by 2.8 percent in May 2024, compared to a slight decrease of 0.1 percent in April 2024. Rural areas saw a year-on-year inflation rate of 8.2 percent in May 2024, down from 14.5 percent in April 2024 and a significant decrease from 42.2 percent in May 2023.
Core Inflation Trends and Impacts
Core inflation, which excludes food and energy prices, also exhibited favorable trends. Non-food non-energy (NFNE) urban inflation stood at 12.3 percent year-on-year in May 2024, down from 13.1 percent in the previous month and 20 percent in May 2023. On a month-on-month basis, this rate increased slightly by 0.4 percent in May 2024 compared to a 2.1 percent increase in April 2024.
Similarly, core inflation in rural areas decreased to 17 percent year-on-year in May 2024, from 19.3 percent in April 2024 and 26.9 percent in May 2023. Month-on-month, rural core inflation rose by 0.5 percent in May 2024 after a 2 percent increase in the previous month.
The decline in inflation across various measures highlights major economic stabilization in Pakistan, offering hope for continued recovery and growth in the coming months.
Read more: Weekly Inflation Skyrockets by 43% in Pakistan
