The Sensitive Price Indicator (SPI), which tracks short-term inflation trends in Pakistan, recorded a 0.35% decline for the week ending March 20, driven largely by a steep drop in vegetable prices, according to data released by the Pakistan Bureau of Statistics (PBS).

Tomatoes led the decline with a price drop of 7.08%, followed by onions (-6.07%), garlic (-5.59%), eggs (-4.64%), and potatoes (-2.5%). Other essential commodities, including sugar (-0.87%) and branded tea (-1.3%), also recorded slight decreases. Firewood, a key domestic fuel source, saw a marginal decline of 0.6%.

However, some consumer items witnessed price increases. The cost of long cloth rose by 1.23%, printed lawn fabric by 2.9%, and liquefied petroleum gas (LPG) by 1.53%. Prices of bananas (+1.45%), bread (+0.55%), beef (+0.25%), and curd (+0.24%) also inched upwards.

Annual inflation trends

On an annual basis, SPI inflation registered a rare decline of 1.2%, indicating a drop in the prices of key staples. Onions witnessed a sharp decrease of 67.67% compared to the same period last year, while wheat flour (-35.58%), tomatoes (-29.45%), and electricity tariffs for the lowest consumption bracket (-18.92%) also contributed to the downward trend. Fuel prices moderated, with diesel (-9.37%) and petrol (-8.55%) recording year-on-year (YoY) declines.

Despite the overall downward movement, several essential goods continued to register significant price hikes. Ladies’ sandals surged by 75.09%, powdered milk by 25.75%, and beef by 21.01%. Chicken (+18.23%), sugar (+18.65%), and vegetable ghee (+16.13%) also recorded notable annual increases, underscoring persistent inflationary pressures in key food categories.

Impact on income groups

Inflationary trends varied across income segments, with lower-income households benefitting more from the recent price adjustments. The lowest consumption quintile saw a 1.84% YoY decline in inflation, whereas the highest quintile recorded a smaller drop of 0.49%.

Despite ongoing inflationary challenges, Pakistan has made notable progress in curbing price hikes. According to estimates from brokerage firm Topline Securities, the Consumer Price Index (CPI) for March 2025 is expected to drop to a three-decade low, ranging between 0.5% and 1.0% YoY, with a monthly increase of 0.9%.

This would bring the average inflation for the first nine months of FY25 to 5.38%, a sharp decline from 27.06% recorded in the same period last year.