PM exults at easing of inflation to decade low in February

ISLAMABAD: Pakistan’s inflation rate dropped to 1.52 per cent in February 2025, the lowest level in nearly a decade, marking the seventh consecutive month of single-digit inflation, official data showed on Monday.

The Consumer Price Index (CPI) decline follows January’s 2.4pc and a sharp drop from 23.06pc a year ago, according to the Pakistan Bureau of Statistics (PBS). February’s inflation is the lowest since October 2015, a stark contrast to May 2023, when it hit a historic high of 38pc. Economists attribute the decline to stable commodity markets, improved supply chains, a relatively steady rupee, and the base effect from last year’s high inflation.

For the first eight months (July-Feb) of FY2024-25, average inflation stood at 5.85pc, down from 27.96pc in the same period last year.

Urban inflation eased to 1.8pc year-on-year, while rural inflation dropped to 1.1pc. Core inflation, which excludes food and energy prices, remained steady at 7.8pc, the same as January, and down from 15.5pc in February 2024.

The CPI drop was driven by falling prices in food, housing, utilities, and transportation. Food inflation played a major role, with prices of food and non-alcoholic beverages contracting 4.15pc year-on-year. Perishable food prices, including tomatoes (-56.76pc), onions (-31.5pc), and potatoes (-20.1pc), saw sharp declines. However, fresh fruit prices rose by 15pc, sugar by 9.35pc, and butter by 5.6pc.

The Wholesale Price Index (WPI) fell to 0.7pc in February, the lowest since June 2016, signalling continued stability in retail prices.

Despite easing price pressures, Pakistan’s real interest rate — now at 10.48 percentage points with the central bank’s policy rate at 12pc — remains highest. Economic analysts warn that prolonged high rates could stifle economic recovery and add fiscal strain, with debt servicing consuming over three-fourths of government revenue. This call for the State Bank to further cut the policy rate.

Reacting over the development, Prime Minister Shehbaz Sharif expressed satisfaction over the record reduction in inflation rate on Monday saying that provision of essential items to people at affordable prices was top priority of the government. In a statement, issued by the PM media wing, Shehbaz expressed satisfaction over continuous decline in the Consumer Price Index inflation.

He also expressed confidence that inflation would decrease further. He said the incumbent government is completing its one year in office and it is extremely good news on this occasion. He said it is very encouraging that inflation has come down to 1.5pc last month, which is the lowest inflation rate since September 2015. He said the average inflation rate remained at 5.9pc from July 2024 to February 2025 months, while in the same period of the previous fiscal year, the average stood at 28pc, which is a significant decrease.

Shehbaz said due to excellent efforts of the government team, economic indicators are improving with each passing day. He said the continuous improvement in the economy is the result of diligent teamwork. He said all institutions were working together to improve the economy, promote business, and investment. The PM said that benefits of macroeconomic improvement had started reaching the public.

Also, PM Shehbaz Sharif decided to present himself and his cabinet members for accountability before a public gathering on the eve of completion of one year of the coalition government on Tuesday (today).

Official sources said the PM, instead of holding a cabinet meeting at the Prime Minister’s House, decided to call cabinet members at a public ceremony to mark completion of government’s first year, at Jinnah Convention Centre.

Sources said the PM, by setting a new tradition, would direct the cabinet members to present one year’s performance of their ministries. The cabinet members would be invited on the stage to present report of their own and performance of their ministries since the incumbent government took over on March 4, 2024.

Sources said representatives of journalists and youth have also been invited at the ceremony. Meanwhile, Federal Information Minister Attaullah Tarar said the coalition government, led by Pakistan Muslim League Nawaz (PMLN), was completing its first year in power with many achievements on the economic, diplomatic and foreign fronts.

“Those who were betting on [Pakistan’s] default are in turmoil today,” Tarar said while addressing a press conference in Islamabad on Monday. Tarar criticised the Imran Khan-founded party that had celebrated the drop in the country’s current account and sent letters to the International Monetary Fund (IMF). “We sacrificed our politics for the state,” said Tarar, adding that important decisions for the country’s development were made under the leadership of PM Shehbaz Sharif to avert default.

Claiming that all economic indicators were positive, Tarar highlighted that inflation rate had dropped to its lowest level in nine years, the interest rate also declined to 12pc, and the stock exchange performing better with each passing day.

The minister said the coalition government also restored the country’s reputation and contacts globally, reversing Pakistan’s “global isolation”, caused by the PTI’s diplomatic failures. The minister added that positive sentiments were being expressed for Pakistan at the international level as many global personalities, including Turkiye president, Abu Dhabi crown prince and others, paid official visits and expressed interest in investment in Pakistan. Separately, United Kingdom’s High Commissioner (HC) Jane Marriott paid a courtesy call on PM Shehbaz Sharif at Prime Minister’s House on Monday.

The PM conveyed his greetings to King Charles III and wished him a quick recovery to full health. He also reiterated his invitation to the king for undertaking a visit to Pakistan at his earliest convenience.

The prime minister also expressed satisfaction at the progress made in bilateral ties between the two countries. While discussing the global situation, the prime minister stressed the need for collective efforts to build lasting peace in Gaza and Ukraine.

The HC said that the UK was committed to strengthening its ties with Pakistan and continuing partnership in the country’s national progress and development.

Also, PM Shehbaz Sharif Monday highlighted Pakistan’s ongoing efforts to invest in a sustainable future for both its people and the planet, marking World Wildlife Day 2025. He highlighted the Green Pakistan Programme as a key initiative empowering local communities by providing economic opportunities that reduce poaching and habitat destruction.

In his message, the PM noted that World Wildlife Day serves as a reminder of the deep, intrinsic connection between humanity and nature. It urges us to reflect on our responsibility to protect the remarkable wildlife that enriches our lives and ecosystems.

“Pakistan is blessed with a mesmerising diversity of wildlife,” said PM Shehbaz, mentioning species ranging from the elusive snow leopards of the Himalayas to the endangered Indus River dolphins and the majestic whale sharks of the Arabian Sea.

“These species are not just part of our natural heritage; they play a vital role in maintaining ecological balance, sustaining our environment, and supporting our economy,” the PM added.

He further explained that this year’s World Wildlife Day theme, ‘Wildlife Conservation Finance: Investing in People and Planet’, highlights the urgent need for innovative financial mechanisms to support wildlife conservation. These efforts recognise the indispensable role of wildlife in maintaining healthy ecosystems, sustainable economies, and human welfare.

Pakistan, being a signatory to the Convention on International Trade in Endangered Species (CITES), has strengthened its legal framework to combat illegal wildlife trade, the PM stated.