Core inflation falls to 7.5% in Oct

Pakistan’s core inflation eased to 7.5% in October, extending its decline for a second month, The Express Tribune reported, citing the Pakistan Bureau of Statistics (PBS). Urban core inflation stood at 7.8% and rural inflation at 7.1%, after the measure reached 8.8% in August.

The State Bank used core inflation concerns when it raised the policy rate to 12% last week, citing the risk that food and energy costs could feed into broader price expectations. With core inflation now 4.5% below the policy rate, the report says the gap benefits commercial banks while increasing the burden on borrowers, including the finance ministry. Headline inflation also slowed to 9.6% in October, while the IMF’s forecast for the current fiscal year is 9.9%, against an official target of 8.2%.