*Pakistan Economy: Jan-2025 CPI at 2.4%; 7MFY25 Avg. at 6.6%* JS Research, February 4, 2025 *Key Points:* *CPI:* January 2025 CPI reached 2.4%, the lowest in over 9 years, primarily due to a favorable base effect from high inflation in the previous year. The 7-month average for FY25 is 6.6%, down from 28.7% in the same period of FY24. *Inflation Drivers:* The main driver was a significant decrease in food inflation, declining 3.13% YoY in January 2025. *Forecast:* The average CPI forecast for FY25 is ~6.2%, with a rebound expected in May and June. *PDL Impact:* An increase in PDL (Petroleum Development Levy) is considered less likely, but if it occurs, it would increase fuel prices and lead to higher inflation. *Real Interest Rate:* Currently at ~9.6ppt. While investors anticipate a policy rate cut due to lower-than-expected inflation, JS Research believes there is limited room for easing. *WPI:* The Wholesale Price Index (WPI) increased by 0.6% YoY in January 2025, driven by higher inflation in food products, beverages, and tobacco.