Pakistan Inflation Drops to Historic 60-Year Low

In a promising turn of economic events, Pakistan's inflation rate for April 2025 is projected to dip to its lowest level in six decades — a development that could bring much-needed relief to millions of citizens struggling with soaring prices in recent years. According to early forecasts, the Consumer Price Index (CPI) could register a historic decline, placing inflation at a record low.

• April 2025 inflation expected to fall below historical 60-year threshold

• Analysts predict CPI may drop below 5% for the first time since 1964

• Improved food supply, currency stability, and global oil prices cited as causes

• Relief expected across fuel, food, and utility sectors

• Government and SBP policies credited for inflationary control

• Concerns remain over long-term sustainability and structural reforms

Over the past few years, Pakistan has battled double-digit inflation driven by:

• Rupee devaluation

• Global oil price surges

• Food supply chain disruptions

• Import dependency and trade deficits

However, the April 2025 inflation rate is anticipated to fall between 4.5% and 4.9%, as per estimates from the Pakistan Bureau of Statistics (PBS) and leading economists. If confirmed, this will mark the lowest year-on-year inflation figure since the early 1960s.

Several factors are contributing to this unexpected, but welcomed, downward trend:

. Stable Rupee Exchange Rate

The rupee has remained relatively stable against the dollar in recent months due to improved foreign reserves and remittance inflows.

. Fall in Global Oil Prices

A significant drop in international crude oil prices has reduced domestic transportation and energy costs.

. Strengthened Agricultural Output

Bumper wheat and vegetable harvests have kept essential food item prices under control.

. Import Substitution Policies

Government-led efforts to encourage local manufacturing and reduce import reliance have helped maintain price stability.

. Effective Monetary Policies by SBP

The State Bank of Pakistan’s tighter monetary stance, including maintaining higher interest rates earlier and later easing, has controlled inflation without hampering growth.

Lower fuel prices are expected to benefit the transportation and logistics sectors

• Electricity and gas tariffs remain under review, with downward pressure likely

• Prices of basic food items like wheat, rice, sugar, and pulses have shown a decline

• Fresh produce is more accessible due to better harvest and distribution

• Lower cement, steel, and utility prices may boost the real estate and housing sectors

• Potential for new housing schemes and affordable home loans

• The cost of household goods, clothing, and electronics is likely to stabilize

• Rise in consumer purchasing power expected

Prime Minister Shehbaz Sharif has welcomed the projections, stating:

“This is a sign of the government’s commitment to economic revival and people-centric governance. We aim to maintain this momentum through fiscal discipline and transparency.”

Finance Minister Muhammad Aurangzeb echoed this sentiment:

“Lower inflation is critical for economic stability and growth. It allows us to pursue reforms while offering citizens relief in their everyday lives.”

“This drop is significant, but policymakers must not become complacent. Structural reforms in taxation, exports, and investment are still vital.”

“This will give a major boost to business confidence and may revive private sector investment.”

While the April dip is being widely celebrated, economists warn of several risks:

• Rebound in global commodity prices

• Political instability that could disrupt markets

• Ongoing IMF program and its implications for subsidy cuts

• Climate impact on future agricultural production

To ensure this progress remains sustainable, long-term reforms in taxation, industry, and energy are essential.

The projected record low inflation rate in April 2025 marks a turning point in Pakistan's economic journey. While the government deserves credit for short-term success, the challenge now is to sustain this stability through tough structural reforms and inclusive growth strategies.