ISLAMABAD: Pakistan’s inflation rate saw a sharp decline in February 2025, dropping to 1.5% year-on-year (YoY), the lowest since September 2015, as per data from the Pakistan Bureau of Statistics (PBS).
The inflation rate in January 2025 stood at 2.4%, meaning a month-on-month decrease of 0.9% was observed in February.
On a cumulative basis, the average inflation rate for the first eight months of the fiscal year (July to February) stood at 5.85%, a sharp contrast to 27.96% recorded in the same period last year.
Breaking down the numbers further, inflation in urban areas dropped to 1.8% in February while in rural areas inflation rate clocked in at 1.1% for the month.
The South Asian country, currently bolstered by a $7 billion facility from the International Monetary Fund (IMF) granted in September, is navigating an economic recovery.
Authorities have credited inflation’s downward trend to economic stabilisation under the IMF programme.
The finance ministry, in its monthly economic outlook report released last week, predicted inflation would stabilize in February between 2.0-3.0%, continuing its downward trend from the previous year. The ministry also forecast a slight increase to 3.0-4.0% by March 2025.
“A favourable base effect from last year’s high inflation contributed to this result. We anticipate an uptick in food inflation during Ramdan,” said Waqas Ghani, head of research at JS Global, adding that the data was primarily driven by a decline in food inflation, with significant price drops in staples.
