Pakistan’s inflation rate eased to 1.5% year-on-year in February 2025, marking a significant economic improvement, according to the Pakistan Bureau of Statistics (PBS).

The Consumer Price Index (CPI) fell by 0.8% in February, following a slight 0.2% increase in January. Data also revealed that the average CPI for the first eight months of FY25 stood at 5.85%, a sharp decline from 27.96% recorded in the same period last year. February’s inflation rate is the lowest since September 2015.

This decline highlights a continued positive shift in Pakistan’s economy, especially considering that inflation had peaked at 38% in May 2023. The Finance Division has projected inflation to remain between 2-3% in the coming months, with a possible rise to 3-4% in March 2025.

The State Bank of Pakistan has played a key role in tackling inflation by reducing the policy rate by 100 basis points to 12%, marking the sixth consecutive rate cut since June 2024.

With inflation steadily declining, the government and economic experts remain optimistic about sustained economic stability, with further monetary policy adjustments expected in the coming months.