Inflation in Pakistan has gone down to a strikingly low level, and it is reaching just 0.7 percent year-on-year in March 2025 — the lowest monthly figure in almost thirty years, as per the Pakistan Bureau of Statistics. This is marking a significant milestone in the country’s economic journey, and a sharp disinflationary trend is highlighted through it. While disinflation highlights a slowdown in the rate of price increases, it’s distinct from deflation, where all-inclusive prices actually fall.
If compared, inflation stood at 1.5 percent in February 2025 and an astonishing 20.7 percent in March 2024. Over the first nine months of FY25, average inflation now stands at 5.25 percent, a dramatic drop from 27.06 percent during the same period last year. Analysts, including those from Topline Securities, described the development as a major economic turnaround, crediting effective fiscal and monetary tightening policies.
Despite the encouraging annual trend, monthly figures showed a slight uptick. On a month-on-month basis, inflation increased by 0.9 percent in March, following a 0.8 percent decline in February.
Read more: Pakistan’s inflation drops to a 9-year low of 1.5% in February
Breaking down the data further reveals interesting patterns. In urban areas, prices of essentials like pulse moong, butter, honey, and sugar continued to climb on an annual basis. Similarly, motor vehicle taxes, footwear, and medical services also recorded notable hikes. Rural regions saw increased prices in fruits, tomatoes, chicken, and eggs, while non-food categories like tailoring and education ticked upward.
Every month, tomatoes, fresh fruits, and eggs led the increase in both urban and rural settings — possibly reflecting seasonal fluctuations or supply chain adjustments.
Despite these numbers, Shehbaz Sharif expressed optimism about Pakistan’s economic direction. Speaking at a public event, he also talked about the government’s success in reducing inflation, a core promise of the PML-N’s election manifesto. Shehbaz also pointed out the reduction in petrol prices and the significant reduction in the monetary policy rate, which has shown massive decline to 12% from a peak of 22%.
While challenges remain, this downward inflation trend is considered to be a rare economic bright spot — and a much required one — for households all over Pakistan.