Pakistan inflation growth slows to lowest in 7 years

Islamabad: Pakistan's inflation slowed to the lowest in more than seven years in February, with risks to the outlook clouded by trade disruptions and volatile global commodity prices.

Consumer price index rose 1.52% last month from a year ago, according to Pakistan Bureau of Statistics. That compares with a median estimate for a 2.2% gain in a Bloomberg survey and a 2.4% rise seen in January. The current reading is the lowest since the current index was created in 2017.

The central bank expects headline inflation to average between 5.5%-7.5% for the year through June 2025. However, it sees risks to the price gains outlook from changing commodity prices and protectionist policies in major economies.

After hitting an all-time high of 38% in May 2023, Pakistan's inflation has recorded a single-digit rise in the last few months, giving room to policymakers to trim the benchmark rates. The State Bank of Pakistan has been easing policy rates since June last year to boost demand and support economic recovery.

Governor Jameel Ahmad in January said stable macro-economic conditions are providing him confidence to review and revise the policy rate downward.

The IMF is assessing the nation's performance under the ongoing $7 billion Extended Fund Facility this week.

Pakistan's authorities have also held talks on a climate resilience loan with the lender.

Food costs contracted 4.15% last month from a year ago after declining 3.13% in January. While housing and energy costs contracted 0.57% in February compared with 1.53% jump in the previous month.