According to data issued by the Pakistan Bureau of Statistics (PBS) on Thursday, the consumer price index (CPI) for July 2024 reported an 11.1% year-over-year (YoY) increase. This is a considerable fall from the 12.6% YoY rise in June and a significant drop from the 28.3% YoY surge in July 2023.
The CPI increased 2.1% monthly in July 2024 despite the yearly fall; this was in contrast to a 3.5% increase in July 2023 and a 0.5% gain in June. The Finance Ministry and MG Research both exceeded their projections for this monthly increase.
The main reason for the decrease in inflation was the lower cost of power after Prime Minister Shehbaz Sharif announced a relief package worth Rs. 50 billion. Customers of residential electricity consumption up to 200 can benefit from this package.
The cost of housing and energy increased little from the previous month by 0.07%, but it increased by 25.3% when compared to the same time last year. Compared to previous year, food expenditures increased by 1.6%, but transportation costs increased by 12.2%.
The State Bank of Pakistan (SBP) reduced its main policy rate by an additional 100 basis points to 19.5% earlier this week. With this decline, there have been two decreases in a row, for a total of 250 basis points since June 2024.
