Pakistan’s inflation falls to lowest level in 80 months

ISLAMABAD: The Finance Division has announced that inflation has been successfully curbed through policy measures and administrative actions, resulting in a drop in the prices of essential items.

In a statement issued on Thursday, the division reported that Consumer Price Index (CPI)-based inflation for the first half of the fiscal year 2025 (July-December) fell to 7.2 per cent, a significant decrease from the 28.8 per cent recorded during the same period last year.

In December 2024, the inflation rate dropped to 4.1 per cent, marking the lowest level in 80 months, since April 2018 when it was 3.96 per cent.

The statement attributed this sharp decline in inflation to a stable exchange rate, sound fiscal management, and improved supply of essential commodities.

Additionally, the division highlighted that strict action against illegal foreign exchange operators, smuggling, and hoarding played a key role in stabilising the exchange rate, boosting market confidence, and ensuring a steady supply of goods.

Furthermore, the Sensitive Price Index (SPI), which monitors the weekly prices of 51 essential items, has shown a consistent decrease over the last four weeks of January 2025. For the week ending 23rd January, the SPI dropped by 0.77 per cent.

During this period, the prices of 12 items decreased, 14 increased, and 25 remained unchanged, indicating overall price stability or a downward trend in essential goods.

The Finance Division also noted that the Economic Coordination Committee (ECC) had observed an unusual rise in the prices of pulses and chicken in early November and responded with corrective actions.

As a result, the price of gram pulse fell by Rs52.5 per kilogram to Rs358.8, while mash pulse saw a reduction of Rs37.4 per kilogramme to Rs490.9. Chicken prices dropped by Rs20.1 per kilogram to Rs440.5, and the cost of a 20kg wheat flour bag decreased significantly from Rs2,816.5 to Rs1,794.3, a reduction of Rs1,022.2.

Over the past four weeks, significant price cuts have also been recorded in items such as tomatoes, potatoes, pulses, eggs, and LPG.

Concluding the statement, the Finance Division said that data from the Pakistan Bureau of Statistics (PBS) confirms that these policy interventions and administrative actions are successfully controlling inflationary pressures.

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