Headline consumer inflation has continued its downward trend for the fifth consecutive month, reaching 11.8 percent in May, marking its lowest level in 30 months and a significant decline from the record high of 38 percent recorded in May 2023, according to official data released on Monday.
The decline in inflation is primarily attributed to a decrease in food prices across urban and rural areas. This decrease is mainly driven by a sharp decline in the prices of essential commodities such as wheat, wheat flour, chicken, and vegetables like tomatoes and onions during the review month.
The decrease in the inflation rate provides a strong basis for the State Bank of Pakistan’s (SBP) monetary policymakers to reconsider the key interest rate, which has remained at a historic high of 22 percent for seven consecutive policy meetings.
The country has been grappling with inflation above 20 percent since May 2022, as it undertook reforms as part of an International Monetary Fund bailout program.
