Pakistan's consumer price index (CPI) rose by 11.8% in May compared to the previous year, marking the lowest inflation rate in 30 months, according to data released by the Pakistan Bureau of Statistics on Monday. This figure also fell below the projections set by the finance ministry.

The decline in inflation comes just a week before the central bank's upcoming meeting to review the key interest rate, which has been kept at a historic high of 22% for seven consecutive policy meetings.

Pakistan has been grappling with high inflation rates above 20% since May 2022. Last year in May, inflation had surged to as high as 38% as the country underwent reforms under an International Monetary Fund (IMF) bailout program. However, inflation has since slowed down significantly.

On a month-on-month basis, consumer prices saw a notable decline of 3.2%, marking the largest drop in over two years.

In its monthly economic report released last week, Pakistan's finance ministry had projected inflation to range between 13.5% and 14.5% for May, with expectations that it would ease to between 12.5% and 13.5% by June 2024.

"The inflation outlook for May 2024 continues on a downward trajectory, attributed to elevated inflation levels in the previous year and improvements in the domestic supply chain of perishable items, staple food like wheat, and a reduction in transportation costs," the report stated.

Actual readings turned out to be even lower due to a sharper decrease in food prices, analysts reported.

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