F.P. Report
ISLAMABAD: Pakistan’s inflation rate continued its sharp decline, reaching a historic low of 0.7% year-on-year (YoY) in March, marking the slowest pace in three decades.
This reflects a trend of disinflation, indicating a slowdown in rising prices, while deflation refers to an overall decrease in price levels. According to the Pakistan Bureau of Statistics, CPI inflation stood at 0.7% YoY in March 2025, down from 1.5% in February and significantly lower than 20.7% in March 2024.
“On a month-on-month basis, inflation increased by 0.9% in March 2025, following a 0.8% decline in the previous month,” the bureau reported. Karachi-based brokerage firm Topline Securities noted, “Pakistan’s CPI for March 2025 recorded at 0.7%, the lowest monthly YoY figure in over 30 years.”
It further stated that inflation averaged 5.25% during the first nine months of FY25, compared to 27.06% in the same period of FY24. The latest figures indicate that Pakistan’s National Consumer Price Index (CPI) rose by 0.89% in March 2025 compared to February 2025 and by 0.69% year-over-year. Food prices, holding the largest share in the CPI basket at 34.6%, remain a primary concern. The food index reached 278.3 in March 2024, marking a 5.1% annual increase.
On a monthly basis, notable price hikes were observed in tomatoes (36.35% in urban areas), fresh fruits (18.66%), and eggs (14.92%). Meanwhile, the cost of some essential food items dropped, including onions (14.89%), tea (7.69%), and potatoes (6.83%). Year-over-year, the prices of pulse moong (31.02%) and butter (23.84%) saw significant increases, while onions and tomatoes experienced sharp declines. This trend reflects the ongoing financial strain on households managing rising food costs.
Housing, which constitutes 23.6% of the CPI, recorded a 2.2% annual rise, whereas transport costs dropped by 1.2%, offering some relief to consumers. Other essential sectors showed notable year-over-year price increases, including clothing and footwear (13.5%), education (11.9%), and health services (13.8%).
Prime Minister Muhammad Shehbaz Sharif expressed satisfaction over the significant drop in inflation to 0.7 percent, calling it a testament to his government’s effective economic policies and dedication to public welfare.
In a statement here, the prime minister underscored that the inflation rate in March 2025 was recorded at just 0.7 percent, a dramatic drop from 20.7 percent in the same month last year which was the lowest inflation level in six decades.
“This Ramazan, inflation was at its lowest in decades, easing the financial burden on citizens,” PM Shehbaz stated. He credited the decline in price hike to the government’s strategic economic planning and tireless efforts to stabilize prices.
The prime minister also emphasized that lower inflation was already translating into positive impacts on people’s lives, with a gradual boost to the economy. “Pakistan is now firmly on the path of progress, and we will continue working day and night for the well-being of our people,” he reaffirmed.