Pakistan’s headline inflation rate drops to 11.76 percent, a 29-month low.

Mohammed Sohail, CEO of Topline Securities, stated in a note that “this is the lowest reading in the last 29 months, i.e. after November 2021.”

According to the most recent CPI data, the average inflation from July to May was 24.52%, down from 29.16% during the same time last year.

The central bank will reassess the key rate, which has stayed at a historic high of 22% for seven consecutive policy sessions, one week prior to the lowest reading.

Since the inflation number is below what the government had anticipated, there is more evidence to support a reduction in the key policy rate at the SBP’s next Monetary Policy Committee meeting on June 10.

Pakistan’s Finance Ministry stated in its monthly economic report that it anticipated inflation to be 13.5% to 14.5% in May 2024 and then drop to 12.5% to 13.5% by June of the same year.

According to the report, “the inflation outlook for May 2024 continues on a downward trajectory, attributed to elevated inflation levels (in the) previous year and improvements in (the) domestic supply chain of perishable items, staple food like wheat and (a) reduction in transportation costs.”

Additionally, the report stated that official talks for a new three-year loan program have started with the International Monetary Fund (IMF). The research states that stable policies depend on the IMF credit program.

The ministry anticipates that more money will be invested in the nation as a result of the loan scheme.

Additionally, the report said that this year’s agricultural production has climbed by 6.25%. The finance ministry underlined that maintaining policy consistency is crucial for maintaining economic stability.