ISLAMABAD: Pakis­tan’s headline inflation dro­pped to 0.7 per cent year-on-year in March 2025, marking the lowest reading since December 1965, according to data released by the Pakistan Bureau of Statistics (PBS) on Thursday.

The decline surpasses both market expectations and the Ministry of Fin­ance’s projection, which had anticipated inflation between 1pc and 1.5pc for March. Research firm Arif Habib Limited (AHL) confirmed the 59-year low, citing State Bank of Pakistan (SBP) data.

The monthly inflation rate stood at 0.9pc, compa­red to a 0.8pc decline in pri­ces in February and a 1.7pc increase in March 2024.

The slowdown in the inflation rate, measured by the Consumer Price Index (CPI), is primarily driven by lower prices of wheat and its by-products, perishable items like onions, potatoes, and certain pulses and a reduction in electricity charges.

These products hold significant weight in inflation calculations, making even minor price changes impactful in reducing the overall inflation rate.

The full effect of the electricity tariff cut, announced by the prime minister on Thursday, is expected to reflect in April’s inflation figures.

In contrast, sugar and edible oil prices are rising in the domestic market despite their declining rates globally. The government has permitted sugar exports, particula­rly to Afghanistan, citing surplus stock as the reason.

The CPI inflation........

© Dawn Business