Karachi: The Consumer Price Index (CPI) for December 2024 has shown a decrease, registering at 4.1%, primarily attributed to a favorable base effect from last year’s high inflation levels. The average CPI for the first half of fiscal year 2025 stands at 7.3%, reflecting a significant change in inflationary trends.
According to JS Global, the decline in food inflation has been notable, dropping to 0.3% year-over-year in December 2024 after experiencing hyperinflationary levels in the previous year. Despite the current decrease, the forecast for the full fiscal year 2025 remains steady at 6.5%, with expectations of a rebound in inflation later in the year. The likelihood of an increase in the petroleum development levy (PDL) appears low in the coming months, but any adjustments could lead to higher fuel prices.
The real interest rate currently stands at approximately 8.9 percentage points. The continued decline in inflation is seen as bolstering the Monetary Policy Committee’s position for a potential interest rate cut.
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