The inflation in Pakistan has dropped to 4.7% during July-April FY2025, down from 26.0% in the same period last year and this significant drop marked a major turnaround after back-to-back years of double-digit price increase.
According to Economic Survey 2024-25 of Pakistan released on Monday, the Consumer Price Index (CPI) reduced to 4.7 percent in May-2025 as after peaking at 29.2% in FY2023 and remaining high at 23.4% in FY2024, inflation has now returned to levels last seen in FY2018. The monthly data showed a steady decline-falling from 11.1% in July 2024 to just 0.3% in April 2025, the lowest recorded since 2015.
The incumbent government’s efforts to stabilize prices include administrative steps, relief measures, and tighter fiscal management. These actions of the government helped bring down food and energy prices, improve supplies, and support the exchange rate. The global declines in commodity prices also played a crucial role. The impact of lower inflation has been felt across major spending categories including Housing, Water, Electricity, Gas, and Fuels which saw inflation of 8.5%, down from 28.4% a year ago.
Meanwhile lower inflation rate was also recorded at restaurants and hotels to 8.2% inflation, down from 28.3% and in the Services sector the inflation dropped to 12.8% from 30.6%, the Education sector stayed high at 11.6%, slightly down from 12.4% last year.
The government’s URAAN Pakistan initiative also supported price stability by lowering production costs and boosting exports, which helped ease pressure on the rupee and import prices. With inflation slowing, businesses face lower input costs, which can support production and investment. The trend also builds confidence in the economy, creating space for growth and stability in the coming months.