Pakistan Interest Rate

The State Bank of Pakistan slashed its key policy rate by 100 bps to 12% during its January 2025 meeting, the lowest level since March 2022, matching market expectations. This marks the sixth consecutive rate reduction, intended to stimulate the economy as inflation subsides. Pakistan's annual inflation rate eased further to 4.1% in December 2024, marking the lowest reading since April 2018, down November's 4.9%, and it is expected to come down again in January. The core rate remains elevated but dropped to 8.1% in December, the lowest level since February 2022. Meanwhile, the economy rose by 0.92% in the first quarter of the fiscal year 2024/25, according to data released by the Statistics Bureau. The central bank maintained its full-year GDP growth at 2.5%-3.5%.