Inflation hits 60-year low at 0.28%

ISLAMABAD: Pakistan’s annual inflation rate eased for a sixth straight month in April, dropping to 0.28 per cent from 0.7pc in March, marking the lowest level in last six decades, official data showed on Friday.

Notably, for the last nine months, the inflation rate is consecutively in singly digit. The Consumer Price Index (CPI) drop in April was a sharp fall from 17.34pc recorded in the same month last year, according to the Pakistan Bureau of Statistics.

Historically, Pakistan’s inflation rate has averaged 8.40pc from 1957 to 2025, peaking at an all-time high of 37.97pc in May 2023 and hitting a record low of -10.32pc in February 1959.

Economists believe that the government’s recent power tariff reduction of Rs7.41pc could further ease inflation in the coming months. Some analysts suggest inflation may even turn negative, bringing tangible relief to household budgets.

Food and beverage deflation worsened in March, with prices tumbling -4.82pc against -5.1pc in March, led by a 26.7pc plunge in perishable food costs.

Other key sectors also saw continued declines — transportation fell -3.91, deeper than March -1.2pc drop, while housing and utilities slid -2.62pc after a -2.2pc decrease in March.

Price pressures eased in several categories. Inflation for clothing and footwear slowed to 9.1pc from 13.5pc. However, household equipment maintenance increased to 4.02pc in April from 3.7pc in previous month, health services inched up 14.15pc from 13.8pc, and recreation and culture to 8.8pc from 7.7pc in March.

Price gains picked up in alcoholic beverages and tobacco too, which rose 7.94pc from 7.5pc a month earlier. Education costs, however, cooled to 10.9pc from 11.9pc.

The government further reported that for the first 10 months (July-April) of FY2024-25, average inflation stood at 4.73pc, down from 25.97pc in the same period last year.

Urban inflation in April was at 0.5pc year-on-year, while rural inflation dropped to 0.10pc, compared to 19.4pc and 14.5pc, respectively, in April 2024.

The Wholesale Price Index (WPI) recorded -2.2 in April 2025, compared to a - 1.6pc decline in March and a 13.9pc increase in April 2024. On month-on-month basis, WPI decreased by 1.3pc in April 2025 as compared to an increase of 0.3pc in the previous month.

Interestingly, core inflation, which excludes food and energy prices, stood at 7.4pc year-on-year in April, down from 8.2pc in March but lower than 13.1pc in April 2024. On a month-on-month basis, it increased by 1.3pc.

Meanwhile, with expectations of a positive outcome over the next few weeks, Pakistan has presented its case forcefully before the representatives of Standard and Poor (S&P) Global Rating Agency with the demand to improve the country’s ratings after granting a health certificate by the IMF. Pakistan is expecting one notch up as the current rating of the country stands at CCC+ with a stable outlook. This rating of CCC+ reflects Pakistan’s reliance on foreign aid to meet its debt obligations and concerns about political stability, but also acknowledges the country’s efforts to address economic challenges.

Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb, along with his team, held a Zoom meeting on Friday with representatives of Standard and Poor (S&P) Global Ratings as part of the ongoing Pakistan Sovereign Ratings Review. He presented a detailed overview of the government’s macroeconomic reform agenda and reaffirmed Pakistan’s commitment to achieving sustainable and inclusive economic growth by enhancing productivity and promoting exports.

Meanwhile, in a separate meeting, FM Aurangzeb held a Zoom meeting on Friday with the office bearers and members of the Overseas Investors Chamber of Commerce & Industry (OICCI). During the meeting, he outlined the government’s broader macroeconomic reform agenda and its ongoing commitment to fostering stability, sustainability, and inclusive growth. The OICCI acknowledged the government’s efforts in engaging international partners and welcomed the sustained policy focus on structural reforms and investor confidence. The chamber noted early signs of improved investor sentiment and reaffirmed its willingness to work with the government to reinforce economic progress. The chamber also noted that its business confidence survey showed improved sentiment over the past year and expressed hope that recent macroeconomic gains would further boost investor optimism in the coming months.

Separately, India asked the International Monetary Fund (IMF) to review loans disbursed to Pakistan, Reuters quoted an Indian government source on Friday. India raised concerns with the IMF on its loans to Pakistan, asking for a review, a government source told Reuters without elaborating. The IMF and India’s finance ministry did not immediately respond to a request for comment. Pakistani sources, however, told The News IMF decisions on loans for countries are made by majority of board members and not by India’s wish list

“It is against the mandate of the IMF’s Board to take political consideration for supporting or opposing a loan tranche for any country. India had always raised unwarranted questions on every occasion of the IMF Board meetings in the last decade, but was never able to block approval of any loan installment from the IMF,” one former official told The News, who was privy to the IMF workings in the past here on Friday. In the past, all such attempts were foiled, and it would meet the same fate again this time.

The adviser to Pakistan’s finance minister said the IMF programme is “well on track”.

“The latest review has been done well and we are completely on track,” adviser Khurram Shehzad, said.