Islamabad: Pakistan’s inflation rates have significantly decreased, hitting a nearly four-year low in September 2024, as the Consumer Price Index (CPI) fell to 6.9%, the lowest rate since January 2021. This decline is attributed to a combination of a favorable base effect from last year’s high inflation rates and a deflationary trend observed over the month.

According to JS Global, September marked the continuation of Pakistan’s sharp disinflation trend, with the CPI registering a monthly contraction of 52 basis points. This period marks the third month within the last six to experience deflation, contributing to a first-quarter fiscal year 2025 average CPI of 9.2%, a substantial reduction from the 29% average recorded in the same quarter of the previous fiscal year.

The report further highlights significant declines in both food and energy prices. Food inflation, notably in hyperinflation last year, recorded a year-over-year decrease of 0.6%, the lowest in six years, influenced by a 138 basis point contraction month-over-month. Wheat prices notably decreased to a 19-month low, falling 38% from their peak in December 2023. Energy prices also declined, aided by decreasing global oil prices, which influenced a reduction in POL product prices and a 191 basis point drop in the Transport Index for September.

Core inflation, however, remains in double digits but fell to a 29-month low of 10.4% in September 2024. Urban core inflation in September also reduced to single digits for the first time since May 2024, recorded at 9.3%, while rural core inflation was higher at 12.1%. Additionally, the Wholesale Price Index (WPI) decreased to 1.9% year-over-year, the lowest in four years, following a contraction of 110 basis points on a month-over-month basis.