Islamabad, April 3, 2025 – Pakistan’s consumer price inflation has declined significantly, falling below 1% in March 2025, largely due to reduced food prices and lower costs in the housing and transport sectors.
The latest data from the Pakistan Bureau of Statistics (PBS) highlights a notable reduction in inflationary pressures across both urban and rural regions.
According to the inflation report, the Consumer Price Index (CPI) inflation decreased to 0.7% year-on-year in March 2025, down from 1.5% in the previous month and significantly lower than the 20.7% recorded in March 2024. This decline in consumer price inflation reflects improving economic stability and a controlled pricing environment.
However, on a month-on-month basis, consumer price inflation in March 2025 saw a 0.9% increase, reversing the 0.8% decline observed in February 2025. This rise is primarily attributed to higher food prices, influenced by seasonal demand during Ramadan.
Urban and Rural Consumer Price Inflation Trends
In urban areas, consumer price inflation stood at 1.2% year-on-year in March 2025, slightly lower than 1.8% in February and a significant drop from 21.9% in March 2024. On a month-on-month basis, urban inflation rose by 0.8% in March 2025, contrasting with a 0.7% decrease in February and a 1.4% increase in March 2024.
In rural regions, consumer price inflation remained stable at 0% year-on-year in March 2025, compared to 1.1% in February and 19.0% in March 2024. However, on a month-on-month basis, rural inflation rose by 1.1% in March 2025 after declining by 1.1% in the previous month.
Consumer Price Inflation Indicators: SPI and WPI
The Sensitive Price Indicator (SPI), which tracks the prices of essential commodities, recorded a year-on-year decline of 2.3% in March 2025, a steeper drop compared to -0.2% in February and a sharp contrast to 25.9% in March 2024. On a month-on-month basis, SPI fell by 0.1% in March 2025, following a 1.6% decline in February.
Meanwhile, the Wholesale Price Index (WPI), another key measure of inflation, declined by 1.6% year-on-year in March 2025, improving from the 0.7% decrease in February but significantly lower than the 14.8% increase recorded in March 2024. On a month-on-month basis, WPI increased by 0.3% in March 2025 after a 0.2% drop in the previous month.
Core Consumer Price Inflation Trends
Core consumer price inflation, which excludes volatile food and energy prices, showed mixed trends. In urban areas, core inflation increased to 8.2% year-on-year in March 2025, up from 7.8% in February but still lower than 12.8% in March 2024. On a month-on-month basis, urban core inflation increased by 0.5% in March 2025 compared to 0.3% in February.
In rural areas, core inflation decreased to 10.2% year-on-year in March 2025, down from 10.4% in February and significantly lower than 20.0% in March 2024. However, on a month-on-month basis, rural core inflation rose by 0.7% in March 2025 compared to a 0.4% increase in February.
Trimmed core inflation, measured using a 20% weighted trimmed mean, showed a year-on-year increase of 4.8% in urban areas, up from 4.6% in February but significantly lower than 14.8% in March 2024. On a month-on-month basis, urban trimmed core inflation rose by 0.3% in March 2025.
In rural areas, trimmed core inflation stood at 4.8% year-on-year in March 2025, down from 5.2% in February and 18.4% in March 2024. On a month-on-month basis, rural trimmed core inflation increased by 0.4% in March 2025.
Conclusion
Pakistan’s consumer price inflation in March 2025 presents a remarkable contrast to previous years, signaling an easing of inflationary pressures. The decline in overall consumer price inflation is largely driven by lower food prices and reductions in the housing and transport sectors. However, the month-on-month increase in inflation highlights persistent challenges, particularly seasonal spikes in food prices. The government’s focus on economic stability and consumer price inflation control will remain crucial in the coming months.