Pakistan’s Inflation Slows Unexpectedly Despite Record Interest Rates

Pakistan’s inflation rate has decreased for the fifth consecutive month, primarily due to improved domestic food supplies and lower fuel prices. This decline in inflation has occurred despite the central bank maintaining record-high interest rates for nearly a year.

According to a Bloomberg survey, consumer prices in May increased by 11.76% compared to the same month last year. This is the lowest inflation rate Pakistan has experienced in almost two and a half years and is better than the median estimate of 13.7%. For comparison, the inflation rate was 17.34% in April, making the May figure a significant improvement.

The consistent drop in inflation over the past five months suggests that measures taken to stabilize food and fuel supplies are having a positive impact.

Lower inflation is good news for consumers, as it means the cost of living isn’t rising as quickly. This relief comes at a time when the central bank’s high-interest rates are aimed at controlling inflation but can also make borrowing more expensive.

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