Islamabad, Feb 3: Pakistan’s Consumer Price Index (CPI) inflation has dropped to 2.41% year-on-year (YoY) in January 2025, marking its lowest level in over nine years, according to the Pakistan Bureau of Statistics (PBS). This is a sharp decline from 4.1% in December 2024 and a significant improvement from 28.3% in January 2024. The average inflation for the first seven months of the fiscal year 2025 (7MFY25) stands at 6.5%, a major drop from 28.73% in 7MFY24.
Urban and Rural Inflation Trends
- Urban inflation fell to 2.7% YoY in January 2025 from 4.4% in December 2024 and 30.2% in January 2024. However, on a month-on-month (MoM) basis, it increased by 0.2%.
- Rural inflation declined to 1.9% YoY in January 2025 from 3.6% in December 2024 and 25.7% in January 2024. MoM, it recorded a slight increase of 0.2%.
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Key Inflation Indicators
Sensitive Price Index (SPI)
- YoY SPI inflation dropped to 0.7% in January 2025, a significant decline from 4.2% in December 2024 and 36.2% in January 2024.
- On a MoM basis, SPI inflation fell to 1.4% from 0.8% in December 2024.
Wholesale Price Index (WPI)
- YoY WPI inflation fell to 0.6% in January 2025 from 1.9% in December 2024 and 27.0% in January 2024.
- MoM WPI inflation saw a 0.2% rise, following a 0.4% decline in December 2024.
Core Inflation Trends
Non-Food Non-Energy (NFNE) Inflation:
- Urban core inflation stood at 7.8% YoY in January 2025, down from 8.1% in December 2024 and 17.8% in January 2024.
- Rural core inflation dropped to 10.4% YoY, compared to 10.7% in December 2024 and 24.6% in January 2024.
- MoM, core inflation increased by 0.8% in urban areas and 0.9% in rural areas.
Trimmed Mean Core Inflation:
- Urban core inflation (trimmed) dropped to 5.4% YoY from 6.2% in December 2024 and 22.1% in January 2024.
- Rural core inflation (trimmed) also fell to 5.4% YoY, down from 6.5% in December 2024 and 25.8% in January 2024.
- MoM, both urban and rural trimmed inflation increased by 0.6% and 0.7%, respectively.
Conclusion
Pakistan’s inflation has witnessed a remarkable slowdown, bringing much-needed relief to consumers. The trend suggests better price stability, largely driven by monetary policies, lower global commodity prices, and improved supply chains. If the downward trajectory continues, it could boost consumer confidence and economic growth in the coming months.
