Islamabad, April 03: Pakistan’s headline inflation fell to 0.7% year-on-year (YoY) in March 2025, a significant decline from 1.5% in February 2025, according to data released by the Pakistan Bureau of Statistics (PBS).
This marks the lowest inflation rate since December 1965, as highlighted by Arif Habib Limited (AHL).
On a month-on-month (MoM) basis, inflation increased 0.9% in March, reversing the 0.8% decline in February.
Inflation Trends and Policy Response
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9MFY25 CPI Inflation: 5.25% (compared to 27.06% in 9MFY24).
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May 2023 Inflation Peak: 38% (record high).
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Projected Inflation for April 2025: 2-3% (per Finance Division).
The Monetary Policy Committee (MPC) maintained the policy rate at 12%, citing lower-than-expected inflation due to drops in food and energy prices.
Also Read: Pakistan’s Inflation Set to Drop to 9-Year Low in January 2025
However, the committee remains cautious about potential risks from volatile commodity prices.
Urban and Rural Inflation Breakdown
Urban Inflation:
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YoY: 1.2% in March 2025 (vs. 1.8% in February 2025 and 21.9% in March 2024).
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MoM: +0.8% in March 2025 (vs. -0.7% in February 2025, +1.4% in March 2024).
Rural Inflation:
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YoY: 0.0% in March 2025 (vs. 1.1% in February 2025 and 19% in March 2024).
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MoM: +1.1% in March 2025 (vs. -1.1% in February 2025, +2.1% in March 2024).
Outlook
Experts anticipate inflation to rise slightly in the coming months but remain significantly lower than previous years.
Read More: Pakistan’s Inflation Drops to 1.5% in February: Lowest Since 2015
The decline reflects improved economic stability, lower food and energy costs, and tighter monetary policies.
However, potential external shocks and exchange rate fluctuations could still pose risks.
