Inflation plummets to 2.5-year low

The inflation rate suddenly nosedived to a nearly two-and-a-half-year low of 11.8% in May due to a slump in food prices and some correction in fuel rates, opening a window for the central bank to rectify its monetary policy by making a major cut in interest rates on June 10th. The Pakistan Bureau of Statistics (PBS) reported on Monday that the Consumer Price Index (CPI)-measured headline inflation rate recorded 11.8% in May compared to the same month a year ago. Apart from the high base effect, the real reduction in the prices of edibles helped pull down the inflation rate to a level that was not even predicted by the government and independent economists. On a month-on-month basis, there was deflation in May compared to April this year, as the index slumped by 3.2%, according to PBS.