Pakistan’s Inflation Drops Below 1% in March 2025 – A Historic Low

Pakistan is set to witness a remarkable decline in its inflation rate, with March 2025 figures expected to fall below 1%—the lowest in three decades. According to Topline Securities, the Consumer Price Index (CPI) for March is projected to be between 0.5% and 1.0% YoY, with a 0.9% month-on-month increase.

This sharp decline brings average inflation for the first nine months of FY25 to 5.38%, a stark contrast to 27.06% recorded last year. The drop signals a significant shift in the country’s economic landscape, easing financial pressures on consumers and businesses alike.

Key Factors Driving the Decline

• Lower Housing & Transport Costs: Declining rents and fuel prices have contributed to the overall reduction in inflation.
• Government Policies & Monetary Measures: The central bank's stringent policies and improved fiscal discipline have played a crucial role in stabilizing prices.
• Global Commodity Trends: A downward trend in international oil prices has helped Pakistan contain inflation.

Challenges Still Remain

While the overall inflation rate is declining, food inflation remains a concern. Prices of tomatoes, fruits, and chicken are rising, potentially affecting household budgets. However, the broader decline in inflation suggests a more stable economic outlook for the country.

Outlook for FY25

With inflation now forecasted to stay between 5-6% for FY25, economic experts believe that lower borrowing costs and improved investor confidence could further boost economic activity. If this trend continues, Pakistan could enter a period of sustained economic stability, providing relief to millions struggling with high living costs in previous years.