Finance Division predicts inflation could rise slightly to 3-4% in March

Pakistan’s headline inflation dropped to 1.5% year-on-year in February 2025, marking the lowest level since September 2015, according to the Pakistan Bureau of Statistics (PBS). The Consumer Price Index (CPI) fell by 0.8% after a slight 0.2% rise in January. The average CPI for the first eight months of FY25 stands at 5.85%, a sharp decline from 27.96% in the same period last year. This reflects a continued positive shift in the economic landscape, especially after inflation peaked at 38% in May 2023.

The Finance Division predicts inflation to remain within 2-3% but could rise slightly to 3-4% in March. To curb inflation, Pakistan’s central bank cut the policy rate by 100 basis points to 12%, marking the sixth consecutive rate cut since June 2024. With inflation easing, experts remain optimistic about economic stability, and further monetary policy adjustments are expected to reinforce this trend.