Inflation drops to 59-year low at 0.7% in March 2025

Headline Inflation YoY

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Pakistan’s headline inflation clocked in at 0.7% on a year-on-year basis in March 2025, a reading below that of February 2025 when it stood at 1.5%, showed Pakistan Bureau of Statistics (PBS) data on Thursday.

On a month-on-month basis, it increased by 0.9% in March 2025 as compared to a decrease of 0.8% in the previous month and an increase of 1.7% in March 2024.

“This is the lowest reading since December 1965 i.e. 59-year low according to SBP data,” said Arif Habib Limited (AHL) in a note.

CPI inflation average during 9MFY25 stood at 5.25% as compared to 27.06% in 9MFY24.

Inflation in Pakistan has been a significant and persistent economic challenge, particularly in recent years. In May 2023, the CPI inflation rate hit a record high of 38%. However, it has been on a downward trajectory since then.

Days ago, the Finance Division said that headline inflation is expected to stay within the 1-1.5% range in March.

“Inflation is anticipated to remain within the range of 1.0-1.5% for March 2025 and inching up to 2-3% in April 2025,” read the report.

The Monetary Policy Committee (MPC) in its last meeting decided to maintain the policy rate stable at 12%.

“The committee noted that inflation in February 2025 turned out lower than expected, mainly due to a drop in food and energy prices.

“Notwithstanding this decline, the committee assessed the risks posed by the inherent volatility in these prices to the current declining trend in inflation. At the same time, core inflation is proving to be more persistent at an elevated level and thus uptick in the food and energy prices may lead to an increase in inflation,” the MPC said in a statement.

Meanwhile, the latest CPI reading was in line with the projections made by several brokerage houses.

Topline Securities projected Pakistan’s headline inflation to remain between 0.5-1% in March 2025, the lowest monthly year-on-year (YoY) reading in over three decades.

Urban, rural inflation

The PBS said CPI inflation urban decreased to 1.2% on a year-on-year basis in March 2025 as compared to 1.8% in the previous month and 21.9% in March 2024.

On a month-on-month basis, it increased by 0.8% in March 2025 as compared to a decrease of 0.7% in the previous and an increase of 1.4% in March 2024.

CPI inflation rural rate showed no change on a year-on-year basis in March 2025 as compared to 1.1% in the previous month and 19% in March 2024.

On a month-on-month basis, it increased by 1.1% in March 2025 as compared to a decrease of 1.1% in the previous month and an increase of 2.1% in March 2024.