Pakistan’s inflation rate, as measured by the Consumer Price Index (CPI), has dropped to 9.6% year-on-year (YoY) in August 2024, reaching its lowest level in 34 months, according to the latest data from the Pakistan Bureau of Statistics (PBS).

The CPI tracks changes in household expenses and provides insight into price fluctuations across various categories. The August figure marks a significant decrease from the 11.1% inflation recorded in July 2024 and a sharp decline from 27.4% in August 2023.

Monthly inflation was reported at 0.39% for August. The Karachi-based brokerage firm Topline Securities noted that this is the lowest inflation reading in 34 months. The average inflation rate for the first two months of the fiscal year 2025 stands at 10.36%, a notable drop from 27.84% in the same period last year.

The report indicates that urban inflation rose by 11.7%, while rural inflation increased by 6.7% in August. Inflation in July was 11.1% compared to 12.6% in June and 28.3% in July 2023. The inflation rate had previously dropped to 11.8% in May 2024, marking a 30-month low.

Prime Minister Shehbaz Sharif has expressed satisfaction with the declining inflation rates and other positive economic indicators. This optimism follows a recent report from the Ministry of Finance, which projected that inflation would remain between 9.5% and 10.5% in August and further decrease to 9-10% in September due to stabilized economic conditions.

Additionally, global rating agency Moody’s has upgraded Pakistan’s credit ratings, citing improvements in macroeconomic conditions and better government liquidity. Moody’s raised Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to Caa2 from Caa3.

Year-on-Year Price Changes:

Urban: Significant increases were seen in food items such as onions (136.32%), fresh vegetables (76.35%), and pulse gram (42.35%). Non-food items like gas charges (318.74%) and motor vehicle tax (168.79%) also saw notable rises.

Rural: Food items like onions (144.27%), fresh vegetables (57.31%), and pulse gram (39.19%) experienced higher prices. Non-food items including motor vehicle tax (126.61%) and woolen readymade garments (38.42%) also rose.

Month-on-Month Price Changes:

Urban: Onions (22.84%), chicken (13.62%), and eggs (12.39%) saw significant increases. Non-food items such as motor vehicle tax (168.79%) and stationery (5.08%) also went up.

Rural: Increases were observed in chicken (19.69%), fresh vegetables (18.67%), and onions (17.72%). Non-food items like motor vehicle tax (126.61%) and dental services (3.24%) also rose.

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