KARACHI: Pakistan’s inflation rate was recorded at 23.1 percent in February, marking its lowest level since June 2022, on an annual basis despite surging food and energy costs, according to official data released on Friday.
Pakistan continues to face historically high inflation, though the situation has improved from the all-time high level of 38 percent recorded last year in May.
Last month, the prices of tomatoes and cigarettes saw substantial increases of 114.6 percent and 71.2 percent, respectively, on an annual basis. Condiments and spices rose by 55.3 percent, sugar by 53.4 percent, fresh vegetables by 46.2 percent and wheat flour by 45 percent.
In the non-food category, gas charges skyrocketed by 318.7 percent, electricity charges by 74.9 percent, transport services by 35.1 percent, textbooks by 34.7 percent, newspapers by 34.2 percent and accommodation services by 29.5 percent.
February’s inflation, the lowest in 20 months, suggests a potential easing in the country’s monetary policy stance.
“The low inflation rate was expected and interestingly despite incorporating recent gas and petroleum price increase in February the number is low. We will see this trend continue in the future and inflation trajectory will be downward,” Tahir Abbas, head of research at Arif Habib Limited, told Arab News.
Given the February inflation rate, experts predict the central bank will begin monetary policy easing from March onwards, with the market anticipating an indicative interest rate cut of around 1 percent this month.
Since June last year, the State Bank of Pakistan has maintained the interest rate at an all-time high of 22 percent.
The central bank recently adjusted its average inflation forecast for the current fiscal year to 23-25 percent, up from 20-22 percent, due to hikes in energy prices.