Pakistan's Economic Turnaround: Inflation Rates Hit a 6-Year Low

Pakistan's inflation rate fell to 4.1% in December, the lowest in over 6 years, thanks to stable currency, global commodity price reductions, and improved supply chains. Supported by a $7 billion IMF loan, the central bank's aggressive rate cuts have positioned the economy for recovery.

Pakistan's inflation rate slowed to 4.1% in December, marking its lowest level in more than six years, according to the statistics bureau's recent report released Wednesday. This decline comes amidst the nation's efforts for economic recovery, supported by a $7 billion International Monetary Fund (IMF) facility granted in September.

The Pakistan Bureau of Statistics reported a marginal 0.1% rise in consumer prices from the previous month. The finance ministry expects the inflation rate to stabilize between 4-5% for December, continuing the trend set by November's 4.9% rate, which was significantly lower following a year of high inflation.

Factors such as a stable currency, lower global commodity prices, and a better supply chain have contributed to the inflation slowdown, noted Samiullah Tariq, head of research and development at Pak Kuwait Investment Company. Meanwhile, the State Bank of Pakistan (SBP) has adopted an aggressive stance with its fifth rate cut since June, bringing the key policy rate down to 13% to further support economic stability.

(With inputs from agencies.)