Pakistan’s inflation likely to stay below three per cent in February

ISLAMABAD: Pakistan’s headline inflation is forecast to remain between 2 and 3 per cent in February and may rise to 3 to 4 per cent by March, according to the Finance Division’s recent projection.

In ‘Monthly Economic Update and Outlook’, the ministry noted that easing inflation and an accommodative monetary policy could further strengthen business confidence, aiding the recovery of Large-Scale Manufacturing (LSM).

“Inflation is expected to stay within the 2 to 3 per cent range for February 2025, with the possibility of a slight increase to 3 to 4 per cent by March 2025,” stated the report.

According to data from the Pakistan Bureau of Statistics (PBS), inflation stood at 2.4 per cent year-on-year in January 2025, a decrease from 4.1 per cent recorded in December 2024.

The Monetary Policy Committee (MPC) recently decided to lower the policy rate by 100 basis points (bps), bringing it down to 12 per cent. Since June 2024, the rate has been reduced by a total of 1000 bps.

“The decision reflects inflation developments in line with expectations, supported by moderate domestic demand and favourable supply-side conditions,” the report added.

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