Karachi: Pakistan's inflation rate is projected to decrease to 1.9% year-on-year by February 2025, marking the lowest level in over nine years, driven by deflation in key sectors such as food, housing, and transport.

According to a statement by AKD Securities Limited, the anticipated reduction in inflation for February 2025 is further supported by a month-on-month deflation rate of 0.5%. The decrease is mainly attributed to significant price reductions in essential commodities, with tomatoes experiencing a 65% drop, onions a 32% decrease, and potatoes easing by 29%.

The report also highlights the expectation of positive real interest rates for February 2025, projected at 10.1%. This figure is anticipated to remain above 7.5% based on a 12-month forward inflation forecast.

In response to these economic indicators, it is expected that the Monetary Policy Committee (MPC) will gradually reduce interest rates by 250 basis points to reach 9.5% throughout the remainder of the calendar year 2025.