Pakistan's Consumer Price Index Drops to Four-Year Low

Pakistan's consumer price index (CPI) dropped to 6.9% year-on-year in September, the lowest in almost four years. This decrease falls within the central bank's target range of 5 to 7%. Policies by the State Bank of Pakistan have been credited for this improvement, maintaining economic stability.

In a sign of improving economic conditions, Pakistan's consumer price index (CPI) for September registered a 6.9% year-on-year (YoY) increase, staying within the central bank's target range of 5 to 7% for next year. Data released on Tuesday by the Pakistan Bureau of Statistics (PBS) confirmed this trend.

This 6.9% rise is the lowest inflation rate observed in almost four years, according to the Dawn newspaper. The CPI, which measures household inflation, includes statistics on price changes for various categories of household expenditure.

On a month-on-month (MoM) basis, the PBS reported a 0.5% decrease in September, contrasting with a 0.4% increase observed in the previous month. The data suggests that inflation remains on track within the central bank's target for the next year.

Recent policies from the State Bank of Pakistan (SBP), aimed at avoiding aggressive monetary easing, have helped reduce inflation and maintain macroeconomic stability. Financial analyst Ayesha Zafar from Capital Investments noted that the central bank's policies have successfully met the target inflation rate for September 2025.

"Aggressive monetary tightening, an emphasis on increasing the tax net, and the International Monetary Fund (IMF) loan are all contributing factors easing the economic scenario," Zafar said.

In contrast, Pakistan experienced a 9.6% YoY inflation rate in August, marking a 34-month low. Prime Minister Shehbaz Sharif has emphasized that his government's economic team is actively pursuing measures to enhance the country's economic outlook.

Pakistan recently received over USD 1 billion from the IMF under a USD 7 billion agreement over 39 months. Prime Minister Sharif's government has been grappling with the economy to alleviate the financial burden on the public.

(With inputs from agencies.)