Prime Minister Shehbaz Sharif on Thursday declared the downward trend of inflation as “welcome news” for the people, saying that inflation falling towards the lowest level in two years was a sign of improvement in the economy.

Consumer price inflation slowed to 17.3 per cent in April from a year earlier, data from the Pakistan Bureau of Statistics (PBS) showed today, the lowest reading in nearly two years and below the finance ministry’s projections.

Pakistan has been beset by inflation above 20pc since May 2022, registering a high of 38pc in May 2023, as it has navigated reforms as part of an International Monetary Fund (IMF) bailout programme.

Month-on-month inflation was down 0.4pc, showing negative growth for the first time since June 2023.

“This is the result of the hard work done during the 16-month-long government led by the Pakistan Democratic Movement (PDM) and continued by the interim government,” PM Shehbaz said in a statement issued by the PM Office.

He said bringing down the inflation rate was the top priority of the government. “With the support of God, the people will get more relief in coming days after increase in the economic activities.”

Shehbaz expressed the hope that the people might also get more relief by further cuts in the petroleum prices which were on a downward trend in the international market.

The prime minister directed the provincial governments to ensure that the impact of the fall in petroleum prices reached the common people and to take special measures for the implementation of food item prices fixed by the Centre.

“The life standard of the people will further improve with further improvement in the economy,” he said.

The government is trying its best to provide maximum relief to the people, the prime minister added.

The finance ministry in its monthly economic report said it expected inflation to hover between 18.5pc and 19.5pc in April and ease further in May to 17.5pc-18.5pc.

“The inflation trajectory is slowing primarily on account of food inflation which has slowed down considerably,” said Faizan Kamran, chief executive of FRIM Ventures, a Karachi-based investment and research company.

Kamran added that he expects inflation to fall into single digits in the next five to six months.

The State Bank of Pakistan (SBP) kept its key interest rate unchanged at 22pc for the seventh straight policy meeting on Monday, hours before the IMF executive board approved $1.1 billion in funding under a $3 billion standby arrangement signed last year.

The bank’s monetary policy committee said in a statement it was “prudent” to continue with its monetary policy stance at this stage to bring inflation down to the target range.

An IMF statement following Monday’s approval by the board said that inflation, while still elevated, continues to decline, and, with appropriately tight, data-driven monetary policy maintained, is expected to reach around 20 per cent by end-June.

Antoinette Sayeh, Deputy Managing Director and Chair at the IMF, said Pakistan’s central bank’s tight monetary policy stance remains appropriate until inflation returns to more moderate levels.

Pakistan plans to approach the IMF again for a longer-term programme by early July. The country completed its nine-month standby arrangement earlier this week.