Pakistan's weekly inflation turns negative after seven years

For the first time in approximately seven years, Pakistan's weekly inflation has turned negative on a yearly basis, registering a decline of 0.87% for the period ending March 6, 2025. On a weekly basis, the Sensitive Price Index (SPI) clocked in at -0.09%.

Significant price decreases were observed in onions (-6%), Lipton tea (-4%), garlic (-4%), tomatoes (-4%), pulse gram (-3%), pulse mash (-3%), potatoes (-3%), diesel (-2%), pulse masoor (-2%), and petrol (-0.24%).

Conversely, notable price increases were seen in bananas (9.79%), sugar (3.15%), LPG (2.64%), eggs (2.52%), mutton (0.33%), wheat flour (0.22%), and beef (0.06%).

Inflation has been a persistent economic challenge in Pakistan, particularly in recent years. In May 2023, the Consumer Price Index (CPI) inflation rate hit a record high of 38%. However, it has been on a downward trajectory since then.

Recently, the Finance Division stated that Pakistan's headline inflation is expected to stay within the 2-3% range in February and may increase to 3-4% by March.

In January, the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) reduced the key policy rate by 100 basis points (bps), bringing it down to 12%. This was the sixth successive cut in the key interest rate since June 2024, when it stood at 22%.

Following the policy rate decision, SBP Governor Jameel Ahmad mentioned that inflation would ease further in January before inching up in the subsequent months. The MPC is scheduled to meet on March 10 to decide on the new policy rate.