Pakistan records 6-year low inflation rate
Pakistan’s inflation rate has plummeted to its lowest level in six and a half years, driven by impactful measures introduced by the Special Investment Facilitation Council (SIFC). This remarkable development has provided a much-needed economic respite, particularly for consumers grappling with high living costs in recent years.
The average inflation rate for the first five months of the current fiscal year has seen a significant drop, falling from 28.62% to 7.88%. November 2024 marked a historic low, with the inflation rate declining to 4.9%. Urban regions have also benefited, experiencing a decrease in annual inflation to 5.2%.
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This sustained reduction in inflation has brought relief to consumers, easing costs for essential items such as food and transportation. The decline is expected to have a cascading effect on household budgets and economic activity.
The Ministry of Finance has outlined an ambitious roadmap to further reduce inflation over the next three years. According to the ministry’s projections:
- Inflation will drop to 12% by 2025,
- Decline to 7.5% by 2026,
- And eventually reach the target of 7% by 2027.
These projections reflect the government’s commitment to ensuring economic stability and safeguarding purchasing power for citizens.
In addition to curbing inflation, the ministry’s report forecasts significant economic growth in the coming years. Pakistan’s growth rate is projected to rise from 3.6% to 5.5% by 2027. The government also aims to improve the primary balance, reducing it from 1.02% to 0.5% of GDP.
The report further highlights plans to reduce Pakistan’s debt-to-GDP ratio. By 2025, this ratio is expected to decline to 68.6%, and by 2027, it is projected to drop further to 66.6%.
The SIFC, which was established to streamline and facilitate investment in Pakistan, has played a pivotal role in these economic improvements. Its measures have not only stabilized inflation but also set the stage for broader fiscal reforms and growth.
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