In a significant economic development, Pakistan’s consumer price index (CPI) registered a year-on-year (YoY) increase of just 0.7% in March 2025—the lowest level in over three decades, according to the Pakistan Bureau of Statistics (PBS). The data signals a sustained slowdown in inflation, often referred to as disinflation, not to be confused with deflation (where prices decline).
This marks a steep fall from the 20.7% inflation rate recorded in March 2024, and even from 1.5% in February 2025, highlighting a notable cooling in price pressures.
Disinflation, Not Deflation
While some price categories still saw increases, the overall trend points toward reduced inflationary momentum—a welcome shift for consumers and policymakers alike. However, experts caution that a low inflation rate doesn’t mean prices are falling; it means they are rising at a slower pace.
On a month-on-month basis, CPI inflation rose by 0.9% in March, reversing a 0.8% decline in February.
Key Insights from Topline Securities
Brokerage house Topline Securities noted, “Pakistan’s CPI for March 2025 has clocked in at 0.7%, the lowest monthly YoY reading in over thirty years.”
They also reported that average inflation for the first nine months of FY25 stands at 5.25%, compared to a staggering 27.06% during the same period last year.
Urban Breakdown: What’s Still Costing More?
Despite the overall dip, several urban food and non-food items saw significant price hikes:
Food items:
- Pulse Moong: +31.02%
- Butter: +23.84%
- Besan: +21.66%
- Honey: +21.02%
- Milk Powder: +20.63%
- Pulse Gram: +19.42%
- Sugar: +18.75%
- Fresh Fruits: +18.31%
- Chicken: +17.20%
- Meat: +15.87%
- Vegetable Ghee: +15.69%
Non-food items:
- Motor Vehicle Tax: +168.79%
- Footwear: +31.89%
- Dental Services: +27.20%
- Medical Tests: +15.53%
- Drugs & Medicines: +15.26%
Rural Areas: Price Trends
Food items:
- Fresh Fruits: +24.62%
- Tomatoes: +22.11%
- Chicken: +15.40%
- Eggs: +14.32%
- Sugar: +11.31%
- Fresh Vegetables: +6.34%
Non-food items:
- Tailoring: +5.13%
- Education: +3.16%
- Readymade Garments: +2.97%
- Liquefied Hydrocarbons: +2.53%
- Cotton Cloth: +1.56%
The Bottom Line
This dramatic drop in inflation is a positive indicator for economic stability, signaling improved monetary control and easing pressure on household budgets. However, persistent price hikes in everyday essentials—from food to healthcare—show that the battle isn’t entirely over.
For consumers, the message is cautiously optimistic: inflation is no longer spiraling—but vigilance remains essential.
