Pakistan’s inflation rate slowed more than expected in December, largely due to easing food prices. According to the Pakistan Bureau of Statistics, the consumer price index (CPI) rose 5.6% year-on-year in December, down from 6.1% in November and below the 5.8% median estimate in a Bloomberg survey.
Food prices increased 3.24% year-on-year in December, down from 5.53% in November, while housing and energy costs rose 6.86%.
In response to the slower-than-expected inflation, the State Bank of Pakistan cut the policy rate by 50 basis points on December 15, bringing it to its lowest level in nearly three years.
The central bank cited stable price pressures and the need to support economic growth after keeping rates unchanged for four consecutive policy meetings.
The Finance Ministry had forecast December inflation between 5.5% and 6.5%. Experts say improved food supplies, subdued global oil prices, and limited energy price adjustments helped contain inflation.
However, risks remain from fiscal slippages, global energy supply shocks, and climate change.
Border tensions with Afghanistan disrupted trade, but alternative sources helped maintain food supply, keeping broader inflation pressures under control.
