Islamabad, May 2, 2025 – Pakistan’s inflation rate has reached a historic milestone, plunging to a year-on-year rate of 0.3% in April 2025, according to the latest data from the Pakistan Bureau of Statistics (PBS). This marks a significant decline from 0.7% in March and represents the lowest inflation level in recent history, signaling a remarkable turnaround for the nation’s economy.
A Sharp Decline in Consumer Prices
The Consumer Price Index (CPI) recorded a month-on-month decrease of 0.8% in April, contrasting with a 0.9% rise in March and a modest 0.4% decline in April 2024. Analysts attribute this sharp drop to falling prices in essential sectors such as food and energy, which have alleviated pressure on household budgets.
“This is a landmark moment for Pakistan’s economy,” noted a Karachi-based economist. “The sustained decline in inflation reflects effective policy measures and stabilizing market conditions, offering relief to consumers after years of high prices.”
A Broader Trend of Economic Stabilization
The average CPI inflation for the first 10 months of fiscal year 2025 (July 2024–April 2025) stood at 4.73%, a stark improvement from the 25.97% recorded in the same period of the previous fiscal year. This follows a period of intense inflationary pressure, with inflation peaking at 38% in May 2023 before embarking on a steady downward trajectory.
Market observers had anticipated a low inflation figure for April, with projections ranging from 0.05% to 0.5%. The actual 0.3% figure aligns closely with these estimates, reinforcing confidence in Pakistan’s economic recovery.
Urban and Rural Inflation Trends
The PBS data highlights distinct trends in urban and rural areas:
- Urban inflation fell to 0.5% year-on-year in April, down from 1.2% in March and a high of 19.4% in April 2024. On a monthly basis, urban CPI decreased by 0.7%.
- Rural inflation registered an even steeper decline, dropping to -0.1% year-on-year, compared to a flat 0% in March and 14.5% in April 2024. Month-on-month, rural CPI fell by 1%.
These figures underscore the widespread nature of the price stabilization, benefiting both urban and rural populations.
Monetary Policy Outlook
The State Bank of Pakistan’s Monetary Policy Committee (MPC) is set to convene on May 5, 2025, to review the policy rate, currently at 12%. Since June 2024, the central bank has reduced the rate by 1,000 basis points from a high of 22%, reflecting confidence in easing inflationary pressures. Analysts widely expect the MPC to maintain the current rate, citing the need to balance economic growth with price stability.
“The low inflation environment provides the central bank with some breathing room,” said a financial analyst. “However, the MPC will likely remain cautious to ensure sustained stability amid global and domestic uncertainties.”
A Bright Spot for Pakistan’s Economy
The record-low inflation rate is a welcome development for Pakistan, which has grappled with economic challenges in recent years. The decline in consumer prices, coupled with prudent monetary policies, has bolstered optimism among businesses and households alike. As the nation continues to navigate its economic recovery, the April inflation figures serve as a testament to the effectiveness of ongoing reforms and stabilization efforts.
