Islamabad: A recent report by Bloomberg indicates that the reduction in Pakistan’s inflation rate is likely to contribute to economic growth by potentially reducing the policy rate.

According to Ministry of Information and Broadcasting, easing price gains, coupled with slower-than-expected economic expansion, may drive the State Bank of Pakistan to further relax its monetary policy to bolster growth. The State Bank has already decreased its benchmark rate by 900 basis points since June, and some economists anticipate the key rate could be reduced to 12 percent by the first quarter of 2025.

The State Bank suggests that controlled demand and better food supplies are expected to lead to a further decline in inflation over the coming months.