Karachi: The Consumer Price Index (CPI) is projected to decrease significantly in November 2024, reaching its lowest level in six years, as inflation continues its downward trend. The CPI is expected to drop to 4.7%, the lowest since April 2018, supported by a high base effect. This decrease follows a modest 32 basis point month-on-month increase, with the 5MFY25 average expected to fall to 7.9%, a stark contrast to the 28.6% average recorded during the same period last year.

According to JS Global, the press release highlights that food inflation, which exceeded 27% last year, is predicted to stabilize at 0.09% year-on-year in November 2024, with a 12 basis point month-on-month increase. Core inflation is anticipated to reach 10.6% in November, marking a month-on-month increase of 150 basis points. The base case estimates for FY25 suggest an average CPI of 8.4%, with the potential to reduce to approximately 7.0% if additional Petroleum Development Levy (PDL) charges are excluded and milk price increases are normalized.

The ongoing trend of declining inflation bolsters the prospects for the Monetary Policy Committee to continue its current monetary easing cycle at the forthcoming meeting on December 16. Current 12-month secondary market yields are trading 230 basis points below the prevailing policy rate of 15%, indicating market expectations of a rate cut.