Inflation drops to near decade low

Pakistan's inflation rate fell to a nearly decade-low level of 2.4% in January, bringing the central bank under pressure to further reduce interest rates to single digits by abandoning its extra-cautious monetary policy. Although the pace of increase in prices was at one of the lowest levels since November 2015, the Economic Coordination Committee (ECC) of the Cabinet on Monday "expressed concerns over the rising prices of sugar, vegetables, and edible oil." The Pakistan Bureau of Statistics (PBS) reported on Monday that inflation, measured by the Consumer Price Index (CPI), eased to 2.4% in January compared to the same month last year. The slow pace aligns with the expectations of the federal government and independent analysts. It was the lowest increase in prices since November 2015, when the reading was 2.7%. With the fresh inflation rate, the gap between headline inflation and the key policy rate of the State Bank of Pakistan (SBP) has widened to 9.6%.