Pakistan has achieved a significant economic milestone as its annual consumer inflation rate dropped to an impressive 4.1% in December 2024. This marks the lowest inflation level in the past 81 months, or over 6.5 years, since April 2018. The Pakistan Bureau of Statistics (PBS) shared this remarkable development, providing hope for consumers and policymakers alike.
The decrease in inflation is a stark contrast to December 2023, when inflation stood at a staggering 29.7%. In November 2024, the inflation rate had already begun to slow, clocking in at 4.9%. These consistent reductions indicate a positive trend, with the first half of the fiscal year 2025 (1HFY25) averaging an inflation rate of just 7.2%, a significant improvement compared to the 28.8% average in the first half of fiscal year 2024 (1HFY24).
Month-on-month data reveals a stable economic scenario. In December 2024, inflation saw a slight increase of just 0.1%, following a 0.5% rise in November 2024. In contrast, December 2023 had witnessed a sharper monthly increase of 0.8%.
The urban areas of Pakistan experienced a similar encouraging trend. Urban CPI inflation decreased to 4.4% year-on-year in December 2024, compared to 5.2% in November 2024 and a whopping 30.9% in December 2023. On a month-on-month basis, urban inflation actually declined by 0.1% in December 2024, as opposed to a 0.5% increase in November 2024 and a 0.7% rise in December 2023.
Rural areas also saw significant progress. Rural CPI inflation dropped to 3.6% year-on-year in December 2024, down from 4.3% in November 2024 and far below the 27.9% reported in December 2023. Month-on-month, rural inflation increased by a modest 0.3% in December 2024, following a 0.5% rise in November 2024 and a 1.0% increase in December 2023.
These figures reflect Pakistan’s strides toward economic stability, offering much-needed relief to citizens burdened by the high costs of living in recent years. The significant reduction in inflation is attributed to various factors, including effective fiscal policies and global economic trends. This progress could also enhance consumer purchasing power and boost overall economic confidence.
The latest inflation statistics underscore the importance of maintaining a steady focus on economic reforms. With inflation at its lowest point in years, Pakistan has an opportunity to build on this momentum, fostering sustainable growth and ensuring long-term economic stability. This achievement is a welcome sign of improvement and a testament to the country’s resilience in the face of economic challenges.
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