Islamabad: Pakistan’s annual headline inflation rate has significantly decreased to 11.76% in May 2024, down from 38% in the previous year, while food inflation has also notably improved, showing a decline to -0.17% from 48.65% in May 2023.
According to United Nations World Food Programme, the easing of food prices has been influenced by a reduction in the cost of staple cereals, with wheat and wheat flour prices seeing substantial decreases, although rice prices have only slightly declined. The report also highlights a stark contrast in the year-on-year pricing of rice, which has seen substantial increases compared to the declining prices of wheat products.
Additionally, the prices of non-cereal food items have shown fluctuations. There was a negligible month-on-month increase in the price of pulse mash, while pulses masoor and moong experienced slight decreases. Year-on-year data shows significant price spikes for pulses mash and masoor. The poultry sector recorded a significant drop in the price of chicken, down by 27%, and a slight decrease in egg prices.
The report also points to an improvement in the Terms of Trade (ToT), which has risen by 28% over the past month and 58% year-on-year, reflecting a stronger economic position for Pakistan in terms of trade and exports relative to imports.