Pakistan’s inflation dropped to 0.3% year on year in April 2025. The price drop marked a significant decline from 0.7% in March. According to the Pakistan Bureau of Statistics (PBS), this is one of the lowest recorded inflation rates in the country’s history.
The recent rebasing of the Consumer Price Index (CPI) caused the decline. On a month-on-month basis, inflation fell by 0.8%, contrasting with a 0.9% increase in March and a 0.4% drop in April 2024.
During the first 10 months of FY25, average CPI inflation stood at 4.73%, a dramatic fall from the 25.97% recorded in FY24. Inflation peaked at 38% in May 2023 but has continued to decline since then.
Analysts at Topline Securities forecasted April’s inflation to fall between 0.05% and 0.5% year on year, largely due to falling food and electricity prices. Their projections closely aligned with the PBS figures.
Urban inflation dropped to 0.5% year on year in April, down from 1.2% in March. Rural inflation slightly declined 0.1%, down from zero change in March. On a month on month basis, urban inflation decreased by 0.7%, while rural CPI fell by 1%.
The State Bank of Pakistan’s Monetary Policy Committee will meet on Monday. It is expected to keep the interest rate steady at 12%. The central bank reduced the policy rate from a peak of 22% in June 2024 to the current level.