Islamabad, Mar 3, 2025: Pakistan’s inflation rate continued its declining trajectory in February, reaching a nine-year low of 1.51% year-on-year (YoY), according to the latest data from the Pakistan Bureau of Statistics (PBS).
This marks the lowest inflation reading in 113 months, reflecting a trend of disinflation, where the rate of price increases slows down but does not enter deflationary territory.
The Karachi-based Topline Securities highlighted that inflation for the first eight months of FY25 had averaged 5.85%, a significant drop from 27.96% in the same period last year.
Meanwhile, Arif Habib Limited pointed out that the current inflation rate was the lowest recorded since September 2015. The YoY consumer price index (CPI) inflation in February 2025 stood at 1.5%, down from 2.4% in January 2025 and a stark contrast to 23.1% in February 2024.
On a month-on-month (MoM) basis, inflation declined by 0.8%, reversing the 0.2% increase observed in the previous month.
Sector-wise Inflation Breakdown
In urban areas, food items that saw the most notable price hikes included pulse moong (32.65%), besan (28.97%), and potatoes (22.88%), while non-food categories such as motor vehicle tax (168.79%) and footwear (31.9%) also saw significant jumps.
In rural regions, food inflation was led by besan (33.86%), pulse moong (32.16%), and meat (21.01%), whereas non-food items, such as motor vehicle tax (126.61%) and education expenses (24.49%), recorded substantial increases.
On a MoM basis, fresh fruits (14.99%), sugar (9.35%), and butter (5.61%) witnessed the highest price surges in urban markets, whereas accommodation services (5.07%) and major tools & equipment (1.16%) led the non-food category.
In rural areas, fresh fruits (13.97%), sugar (9.73%), and cleaning & laundering services (2.88%) saw the largest increases.
Government’s Response
Information Minister Attaullah Tarar emphasized that Prime Minister Shehbaz Sharif welcomed the record-low inflation, noting that its benefits were beginning to reach the public.
He also stated that the government remains committed to further reducing inflation, with the Prime Minister set to review economic progress in an upcoming meeting.
