High cost of living

OVER the past few months, the rate at which the prices of goods and services in the country have risen has slowed significantly. Headline fell to a 44-month low of 6.9pc last month. This decline, driven by a high-base effect from last year when annual inflation stood at 31.4pc, along with plunging global oil and commodity prices, a stable exchange rate, falling demand due to eroding real wages, and, last but not least, aggressive monetary tightening, exceeds the projections of the government and the market. Latest figures from the Pakistan Bureau of Statistics show that both sticky core inflation and the three-month average inflation rates, although higher than CPI inflation, have also fallen to single digits, signalling a substantial easing of inflationary pressures. The narrowing gap between the CPI and core inflation — which excludes energy and food prices —suggests a slowdown in imported inflation.