According to the latest economic data released, Pakistan’s annual consumer price inflation rate declined to 6.9 percent in September, reaching its lowest level in more than three years.
This fall in inflation comes as the Pakistani government strives to meet the strict demands of the International Monetary Fund (IMF).
The IMF approved a $7 billion loan program last month, which requires Pakistan to implement certain economic reforms, including increasing taxes on agricultural income and electricity prices.
The Pakistan Bureau of Statistics reported that the inflation rate had previously slowed to 9.6% the previous month, marking the first time in more than three years that the rate had fallen into single digits. Additionally, the monthly consumer price index for September showed a reduction of 0.5%.
Mohammad Sohail, CEO of Topline Securities, attributes the decline to the State Bank of Pakistan’s (SBP) assertive monetary policies, saying, “Through aggressive monetary tightening, the SBP managed to bring inflation below 7% with one year ahead of target.”
The central bank has cut interest rates three times in the current year, maintaining its confidence in controlling inflation after a period when rates soared to a historic high of 22%.
The Ministry of Finance, in its recent economic outlook, had predicted that the annual inflation rate would fall to between 8 and 9% for September and October.
Despite this positive trend in inflation rates, the potential impact of IMF-mandated reforms has raised concerns among less affluent and middle-class Pakistani citizens. They fear the upcoming measures will lead to higher costs, worsening their financial woes after years of rising inflation.
Reuters contributed to this article.
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