Karachi: Inflation in January 2025 is projected to decline to a nine-year low of 2.8%, continuing a noticeable trend of disinflation, as reported by JS Global. Despite a 0.6% month-on-month increase, the consumer price index (CPI) is anticipated to reach its lowest point since November 2015, primarily due to a high base effect.

According to a statement by JS Global, the average inflation for the first seven months of the fiscal year 2025 is expected to fall to 6.7%, a significant decrease from the 28.7% recorded during the same period in the previous fiscal year. This ongoing disinflation trend is likely to influence the Monetary Policy Committee's strategy to maintain the easing cycle.

The statement further elaborates that the base case estimate for the fiscal year 2025 average inflation is 6.3%. However, an immediate addition of Rs10 per liter in the petroleum development levy could slightly raise this figure to approximately 6.4%.

JS Global's market survey indicates a prevailing expectation of a 100 basis point reduction in the policy rate this month as part of the continued easing cycle. This expected cut follows a series of monetary policy adjustments aimed at managing inflation while supporting economic growth.