Karachi, March 7, 2025 – In a significant economic development, Pakistan’s weekly inflation, as measured by the Sensitive Price Indicator (SPI), has turned negative for the first time in nearly seven years.
Analysts attribute this decline to falling prices of essential commodities, providing some relief to consumers amid ongoing economic challenges.
According to Muhammad Sohail, CEO of Topline Securities Limited, the SPI recorded a year-on-year (YoY) decrease of 0.9% for the period ending March 6, 2025. This marks the first negative inflation reading in approximately seven years, signaling a potential shift in the inflationary trend that has persisted in recent times.
The primary contributors to this decline include a significant reduction in the prices of key food and fuel items. The most notable decreases were observed in Onions (-6%), Tea Lipton (-4%), Garlic (-4%), Tomatoes (-4%), Pulse Gram (-3%), Pulse Mash (-3%), Potatoes (-3%), Diesel (-2%), Pulse Masoor (-2%), and Petrol (-0.24%).
On a weekly basis, the SPI dropped by 0.09% for the week ending March 6, 2025. This decline was primarily driven by falling prices of Onions (5.59%), Tea Lipton (4.47%), Garlic (3.89%), Tomatoes (3.60%), Pulse Gram (3.49%), Pulse Mash (2.82%), Potatoes (2.60%), Diesel (2.00%), Pulse Masoor (1.50%), and Petrol (0.24%). Despite this decline, inflation remains a pressing concern for many households as other essential goods continue to see price increases.
Conversely, certain commodities experienced price hikes, including Bananas (9.79%), Sugar (3.15%), LPG (2.64%), Eggs (2.52%), Lawn (0.55%), Mutton (0.33%), Wheat Flour (0.22%), Long Cloth (0.17%), Cigarettes (0.06%), and Beef (0.06%).
Out of the 51 items monitored in the SPI, prices of 13 items (25.49%) increased, 20 items (39.22%) decreased, while 18 items (35.29%) remained stable. While the overall inflation rate has shown a decline, the cost of living remains high due to persistent inflationary pressures in various sectors.
The YoY trend highlights a broader decline of 0.87%, with steep reductions in the prices of Onions (64.92%), Tomatoes (57.05%), Wheat Flour (36.81%), and Chilies Powder (20.00%). Electricity charges, Tea Lipton, and essential pulses also saw price drops. However, inflationary pressures persist in other areas, with notable increases in the prices of Ladies Sandals (75.09%), Bananas (30.96%), Pulse Moong (26.90%), Powdered Milk (25.86%), Beef (22.51%), and Vegetable Ghee.
Although the recent data suggests a temporary relief from inflation, experts caution that sustained measures are needed to ensure long-term price stability. While the negative SPI reading is a welcome sign, broader economic challenges, including supply chain disruptions and currency fluctuations, continue to exert inflationary pressures on the economy.