Pakistan’s inflation rate eased to 1.5% in February 2025, marking a decline from 2.4% recorded in January, according to data from the Pakistan Bureau of Statistics (PBS). On a month-on-month basis, the Consumer Price Index (CPI) fell by 0.8% in February, compared to a 0.2% increase in January, indicating a notable slowdown in price hikes.
The average CPI inflation for the first eight months of the fiscal year 2025 stood at 5.85%, significantly lower than the 27.96% recorded during the same period in FY24. Analysts at Arif Habib Limited (AHL) noted that February’s inflation was the lowest since September 2015, reflecting a continued downward trend after reaching a record high of 38% in May 2023.
Read more: Weekly Inflation Records a Modest Decline
The Finance Division had earlier projected inflation to remain between 2% and 3% in February before rising to 3-4% in March. In January, the State Bank of Pakistan’s Monetary Policy Committee (MPC) reduced the key interest rate by 100 basis points to 12%, marking the sixth consecutive rate cut since June 2024, when it stood at 22%. SBP Governor Jameel Ahmad indicated that inflation was expected to dip in early 2025 before gradually increasing in the following months.
Urban inflation in February dropped to 1.8% year-on-year, compared to 2.7% in January and 24.9% in February 2024. Rural inflation also declined, standing at 1.1% from 1.9% a month earlier and 20.5% in February 2024. On a month-on-month basis, urban and rural inflation recorded declines of 0.7% and 1.1%, respectively, signaling an overall cooling of price pressures across the country.
