‘Beyond imagination,’ Pakistani PM says as November inflation slows to 4.9% year-on-year

ISLAMABAD: Prime Minister Shehbaz Sharif said it was “beyond imagination” that Pakistan’s annual consumer inflation had slowed to 4.9% in November, lower than the government’s forecast and the lowest in nearly six years.

The finance ministry had projected inflation would slow to 5.8%-6.8% in November and ease to 5.6%-6.5% in December, it said in its monthly economic report published last week. The South Asian country slashed interest rates by 250 basis points earlier in November to help revive a sluggish economy amid a big drop in the rate of inflation.

Consumer inflation cooled from 7.2% in October, a sharp drop from a multi-decade high of nearly 40% in May 2023. Consumer prices in November rose +0.5% from October, according to the Pakistan Bureau of Statistics.

“After 70 months, the inflation rate in Pakistan in November is at its lowest level. In 2018, it was 3.5% during the era of [Prime Minister] Mian Mohammad Nawaz Sharif, this month, it has reached 4.9%,” Sharif told his cabinet in televised comments.

“This is a great grace of God. It is beyond imagination. Because inflation is the only tool that increases poverty or brings relief. This is a record after 70 months, this decrease will reduce the burden on the poor.”

Pakistan's annual consumer price inflation rate slowed to 9.6% in August, the first single-digit reading in almost three years.

A last-minute IMF rescue package last summer had helped Pakistan avert a sovereign default but, to secure it, the country had to revise its budget, and raise interest rates, taxes, and electricity and gas prices.

As a result, during the period, Pakistan struggled through inflation as high as 38%, historic depreciation in its currency, and contraction of the economy.

A new 37-month $7 billion loan bailout was approved for Pakistan by the IMF in September.