Inflation decline

THE headline CPI inflation declined to a 34-month low in August to 9.6pc, providing more space to the State Bank for the third consecutive policy rate cut later this month. That the CPI inflation has finally eased below 10pc into single-digit territory on decreasing prices of non-perishable goods and a high base effect from last year does not mean prices have started to drop or stopped from rising. Far from it. The end to the sufferings of the common man are not yet in sight. Even though the year-over-year CPI reading has massively fallen, it did edge up slightly from July as it rose by 39bps month-over-month. The average inflation rate for 2MFY25 stands at 10.4pc, a substantial decrease from the 27.8pc average of 2MFY24. WPI also reached a nearly four-year low of 6.3pc in August, with a minor monthly uptick, underlining a slower rise in the pace of increase in the prices of items consumed by lower economic strata of the population.