By Ariba Shahid

KARACHI (Reuters) -Pakistan's annual inflation rate slowed to 1.5% in February, the lowest in nearly a decade and below the finance ministry's estimates, data from the statistics bureau showed on Monday.

Inflation has cooled significantly, easing from 23.1% in February 2024.

Consumer prices in February fell 0.8% from the month before, according to the Pakistan Bureau of Statistics.

The South Asian country, currently bolstered by a $7 billion facility from the International Monetary Fund (IMF) granted in September, is navigating an economic recovery.

Authorities have credited inflation's downward trend to economic stabilization under a the IMF programme.

Pakistan's finance ministry, in its monthly economic outlook report released last week, predicted inflation would stabilize in February between 2.0-3.0%, continuing its downward trend from the previous year. The ministry also forecast a slight increase to 3.0-4.0% by March 2025.

"A favorable base effect from last year's high inflation contributed to this result. We anticipate an uptick in food inflation during Ramzan," said Waqas Ghani, head of research at JS Global, adding that the data was primarily driven by a decline in food inflation, with significant price drops in staples.