Pakistan's Short-Term Inflation Goes Negative After 7 Years

The Sensitive Price Index (SPI)-based inflation in Pakistan recorded a 0.87% decrease for the week ending March 6, 2025, marking the first year-on-year (YoY) decline in nearly seven years, according to data from the Pakistan Bureau of Statistics (PBS).

Inflation Trends: Key Price Changes

According to Topline Securities, this rare drop in inflation is primarily due to significant price reductions in essential commodities. Some of the most notable price decreases over the past year include:

Onions (-64.92%)
Tomatoes (-57.05%)
Wheat Flour (-36.81%)
Chilies Powder (-20.00%)
Electricity Charges (Q1) (-18.92%)
Tea (Lipton) (-14.92%)
Diesel (-9.91%)
Petrol (-8.55%)

While the overall trend indicates a decline, certain essential items have seen price hikes, including:

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Ladies Sandals (+75.09%)
Bananas (+30.96%)
Pulse Moong (+26.90%)
Powdered Milk (+25.86%)
Beef (+22.51%)
Vegetable Ghee (1kg) (+16.12%)
Eggs (+13.52%)

Week-on-Week Inflation Trends

On a week-on-week (WoW) basis, inflation fell by 0.09%, driven by lower fuel and food prices. The biggest weekly price drops were recorded for:

Onions (-5.59%)
Tea (Lipton) (-4.47%)
Garlic (-3.89%)
Diesel (-2.00%)
Petrol (-0.24%)

Among the 51 tracked items,

13 items (25.49%) saw price increases,
20 items (39.22%) experienced declines,
18 items (35.29%) remained unchanged.

What This Means for Pakistan’s Economy

This drop in YoY inflation, particularly after seven years of rising prices, signals potential economic stabilization. However, the mixed trend across different commodities suggests that some household essentials remain costly, impacting consumers differently based on their spending habits.

As Pakistan navigates its economic recovery, further price adjustments in fuel, food, and utilities will play a critical role in shaping inflation trends in the coming months.