Karachi, March 7, 2025 – In a noteworthy development for Pakistan’s economy, the country’s weekly inflation, as measured by the Sensitive Price Indicator (SPI), has turned negative for the first time in nearly seven years. This change provides some relief to consumers grappling with rising living costs amid ongoing economic challenges.
According to Muhammad Sohail, CEO of Topline Securities Limited, the SPI recorded a year-on-year (YoY) decrease of 0.9% for the period ending March 6, 2025. This marks the first negative inflation reading since the country has been experiencing persistent inflationary pressures, indicating a potential shift in the inflationary trend.
The decline in weekly inflation can largely be attributed to a significant reduction in the prices of essential food and fuel items. Some of the most notable price decreases were observed in commodities such as onions (-6%), tea Lipton (-4%), garlic (-4%), tomatoes (-4%), and various pulses like gram (-3%), mash (-3%), and masoor (-2%). Fuel prices also contributed to the negative inflation, with a 2% reduction in diesel prices and a slight decrease of 0.24% in petrol prices.
For the week ending March 6, 2025, the SPI fell by 0.09%, driven primarily by price drops in onions (-5.59%), tea Lipton (-4.47%), garlic (-3.89%), and tomatoes (-3.60%), among others. Despite these positive signs, inflation continues to be a challenge for households, as several essential items still saw price increases, which continue to pressure household budgets.
Conversely, several goods experienced price hikes during this period. Bananas saw a significant increase of 9.79%, followed by sugar (3.15%), LPG (2.64%), eggs (2.52%), mutton (0.33%), and wheat flour (0.22%). These price hikes highlight the uneven nature of inflation, where some sectors have benefitted from falling prices, while others continue to face upward pressure.
Out of the 51 items tracked in the SPI, 13 items (25.49%) saw an increase in prices, 20 items (39.22%) experienced a decrease, and 18 items (35.29%) remained stable. While the overall trend shows a decline, it’s evident that the cost of living remains high due to persistent inflationary pressures across various sectors.
Looking at the YoY trend, there is an overall decrease of 0.87%, with significant reductions in the prices of key items like onions (-64.92%), tomatoes (-57.05%), wheat flour (-36.81%), and chilies powder (-20.00%). Essential products like electricity charges, tea Lipton, and pulses also saw notable price drops. However, inflationary pressures continue to persist in other areas, with steep price hikes in items like ladies sandals (75.09%), bananas (30.96%), pulse moong (26.90%), powdered milk (25.86%), and beef (22.51%).
While this recent data suggests some temporary relief from inflation, experts caution that more comprehensive measures are necessary to achieve long-term price stability. The negative SPI reading is a positive sign, but broader economic challenges such as supply chain disruptions, currency fluctuations, and global inflationary trends remain influential factors that continue to exert pressure on Pakistan’s economy.
In conclusion, while Pakistan is witnessing a rare moment of negative inflation, the road to sustained economic stability remains complex and challenging. Continued policy intervention, alongside efforts to stabilize the currency and address supply chain issues, will be crucial to maintaining the gains made in the fight against inflation.