Pakistan Inflation Slows Unexpectedly Despite Record Interest Rates

 

 

 

Pakistan’s inflation rate has decreased for the fifth month in a row, mainly due to better domestic food supplies and lower fuel prices. This decline in inflation happened even though the central bank has kept interest rates at record highs for almost a year.

 

 

According to a survey by Bloomberg, consumer prices in May increased by 11.76% compared to the same month last year.

This is the lowest inflation rate Pakistan has seen in almost two and a half years and is better than the median estimate of 13.7%. To put it in perspective, the inflation rate was 17.34% in April, making the May figure a significant improvement.

 

 

 

The consistent drop in inflation over the past five months suggests that the measures taken to stabilize food and fuel supplies are having a positive impact.

Lower inflation is good news for consumers, as it means the cost of living isn’t rising as quickly. This relief comes at a time when the central bank’s high-interest rates are aimed at controlling inflation but can also make borrowing more expensive.