The Consumer Price Index (CPI)-based inflation came down to 20.7 percent during the month of March 2023 as compared to 23.1 percent recorded during February 2023, Pakistan Bureau of Statistics (PBS) reported Monday. According to PBS data, the CPI based inflation during the same month of last year was recorded at 35.4%. On month-on-month basis, it increased to 1.7% in March 2024 as compared to no change observed in the previous month and an increase of 3.7% in March 2023. According to the data, CPI inflation Urban, increased to 21.9% on year-on-year basis in March 2024 as compared to an increase of 24.9% in the previous month and 33.0% in March 2023. On month-on-month basis, it increased to 1.4% in March 2024 as compared to an increase of 0.2% in the previous month and an increase of 3.9% in March 2023. CPI inflation Rural, increased to 19.0% on year-on-year basis in March 2024 as compared to an increase of 20.5% in the previous month and 38.9% in March 2023. On month-on-month basis, it increased to 2.1% in March 2024 as compared to a decrease of 0.3% in the previous month and an increase of 3.5% in March 2023. The Sensitive Price Indicator (SPI) inflation on YoY increased to 25.9% in March 2024 as compared to an increase of 30.4% a month earlier and 40.4% in March 2023. On MoM basis, it increased by 2.1% in March 2024 as compared to a decrease of 0.8% a month earlier and an increase of 5.8% in March 2023. The Wholesale Price Index (WPI) inflation on YoY basis increased to 14.8% in March 2024 as compared to an increase of 18.7% a month earlier and an increase of 37.5% in March 2023. On MoM basis, it increased by 1.3% in March 2024 as compare to an increase of 1.1% in the previous month and an increase of 4.7% in corresponding month of last year i.e. March 2023. The core inflation (NFNE), measured by non-food non-energy Urban increased to 12.8% on (YoY) basis in March 2024 as compared to an increase of 15.5% in the previous month and 18.6% in March 2023. On (MoM) basis, it increased by 0.1% in March 2024 as compared to an increase of 0.3% in previous month, and an increase of 2.5% in corresponding month of last year i.e. March, 2023. The core inflation Rural increased to 20.0% on (YoY) basis in March 2024 as compared to an increase of 21.9% in the previous month and 23.1% in March 2023. On (MoM) basis, it increased by 0.8% in March 2024 as compared to an increase of 0.4% in previous month, and an increase of 2.4% in corresponding month of last year i.e. March 2023. The latest inflation figure, the lowest since May 2022, has stirred discussions regarding the trajectory of Pakistan’s monetary policy. It is noteworthy that for the first time in over three years, the Consumer Price Index (CPI)-based inflation has fallen below the critical policy rate, currently set at 22%. The Ministry of Finance’s projection of CPI-based inflation hovering around 22.5-23.5% in March 2024 has been outstripped by the actual figure, lending credence to expectations of an impending reduction in the key interest rate. Despite the recent hike in petrol prices, with an increase of Rs9.66 per liter, the overall inflationary pressures have shown signs of moderation. The government’s measures, including a revised relief package for Ramadan, have contributed to alleviating the impact of heightened demand during the religious festival. Furthermore, global dynamics have played a role in shaping inflation trends, influencing the overall economic outlook. Brokerage firms such as Arif Habib Limited (AHL) and IGI Securities have also weighed in on the matter, forecasting a further decline in inflation levels for March 2024. AHL predicts a year-on-year headline inflation rate of 20.2%, while IGI Securities estimates a national CPI growth of 20.3% year-on-year. The disaggregated data provided by the PBS reveals that urban CPI inflation increased to 21.9% year-on-year in March 2024, compared to the previous month’s 24.9%. Similarly, rural CPI inflation stood at 19.0% year-on-year, reflecting a downward trend from the previous month’s 20.5%. The State Bank of Pakistan’s Monetary Policy Committee (MPC) has maintained a cautious stance, keeping the key policy rate steady at 22% in its last meeting. While acknowledging the noticeable decline in inflation, the MPC remains vigilant, emphasizing the need for continuity in the current monetary stance to achieve the target inflation range of 5–7% by September 2025. As Pakistan navigates through these economic dynamics, stakeholders await further developments, particularly regarding the future direction of monetary policy in response to the evolving inflationary landscape.