Pakistan’s Inflation Drops to 1.5% in February, Lowest in Nine Years
ISLAMABAD: Pakistan’s inflation rate experienced a significant decline in February 2025, falling to 1.5% year-on-year (YoY), marking the lowest level since September 2015, according to data released by the Pakistan Bureau of Statistics (PBS).
This decrease follows a 2.4% inflation rate recorded in January 2025, reflecting a month-on-month drop of 0.9%.
For the first eight months of the fiscal year (July to February), the average inflation rate stood at 5.85%, a stark contrast to the 27.96% recorded during the same period in the previous year.
A closer look at the figures shows that inflation in urban areas declined to 1.8% in February, while rural areas saw a lower inflation rate of 1.1% for the same period.
Pakistan, currently supported by a $7 billion financial package from the International Monetary Fund (IMF) secured in September, continues to navigate an economic recovery. Authorities attribute the steady decline in inflation to stabilization efforts under the IMF program.
The finance ministry, in its recent economic outlook report, projected that inflation would remain between 2.0% and 3.0% in February, maintaining its downward trajectory from the previous year. However, it anticipates a slight increase to 3.0%–4.0% by March 2025.
“A favorable base effect from last year’s high inflation contributed to this decline. However, we expect a rise in food inflation during Ramadan,” said Waqas Ghani, head of research at JS Global. He noted that the drop in inflation was largely driven by lower food prices, with major staples witnessing significant reductions.
