Pakistan’s inflation rate dropped to a historic low of 0.30% year-on-year in April 2025, down from 0.70% in March, according to the Pakistan Bureau of Statistics (PBS). This marks the lowest inflation level ever recorded in the country, providing much-needed relief to consumers and businesses. On a monthly basis, prices fell by 0.8%, compared to a 0.9% increase in March.
The average inflation for the first ten months of FY25 stood at 4.73%, a dramatic improvement from 25.97% during the same period last year—a 21.24 percentage point decline. Analysts attribute this sharp drop to stable commodity prices, fiscal discipline, and effective government policies.
Economists now anticipate a potential interest rate cut in upcoming monetary policy decisions, which could stimulate borrowing and economic growth. However, experts caution that sustaining this trend will require continued fiscal prudence.
Urban inflation fell to 0.5% YoY (down from 1.2% in March), while rural inflation declined to -0.1% YoY, indicating slight deflation in some areas.
At the Pakistan Conference 2025 at Harvard University, Finance Minister Mohammad Aurangzeb highlighted the government’s success in stabilizing the economy, stating, “We inherited severe challenges—contracting GDP, depleting reserves—but have restored confidence and reignited growth.”
While the record-low inflation signals economic recovery, policymakers remain focused on structural reforms and investment in key sectors, including Pakistan’s untapped mineral wealth, to ensure long-term, inclusive growth.
The State Bank of Pakistan (SBP), set to review monetary policy soon, is expected to hold interest rates steady at 12% after cutting them by 1,000 basis points since mid-2024. Market analysts suggest further easing may follow if inflation remains subdued.
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