Pakistan’s Inflation Sees a Dip as Vegetable Prices Drop: SPI Reports Decrease

SPI inflation posts a rare decline of 1.2%.

By DTD- On Mar 22, 2025

KARACHI: Pakistan’s Sensitive Price Indicator (SPI), which measures short-term inflation, recorded a 0.35% decrease in inflation during the week ending March 20, according to the Pakistan Bureau of Statistics (PBS).

The decrease in inflation was primarily driven by a significant drop in vegetable prices. Tomatoes saw the largest fall at -7.08%, followed by onions (-6.07%), garlic (-5.59%), eggs (-4.64%), and potatoes (-2.5%). Additionally, other essential goods like sugar (-0.87%) and Lipton tea (-1.3%) experienced slight price drops, while firewood, an important domestic fuel source, decreased by 0.6%.

However, some consumer items did experience price hikes. Long cloth (+1.23%), printed lawn fabric (+2.9%), LPG (+1.53%), and bananas (+1.45%) all saw price increases. Basic necessities such as bread (+0.55%), beef (+0.25%), and curd (+0.24%) also witnessed slight price rises.

On an annual basis, SPI inflation posted a rare decline of 1.2%. Key staples like onions (-67.67%), wheat flour (-35.58%), tomatoes (-29.45%), and electricity charges for the lowest consumption bracket (-18.92%) saw significant price drops, contributing to the overall decrease. Fuel prices also moderated, with diesel (-9.37%) and petrol (-8.55%) experiencing year-on-year (YoY) declines.

However, despite the overall dip, some essential items remained significantly more expensive compared to the previous year. Ladies’ sandals surged by 75.09%, powdered milk increased by 25.75%, and beef prices climbed by 21.01%. Other food categories like chicken (+18.23%), sugar (+18.65%), and vegetable ghee (+16.13%) also showed notable annual price hikes, reflecting ongoing inflationary pressures.

The impact of inflation varied across income segments, with lower-income households benefiting more from the price declines. The lowest consumption quintile recorded a 1.84% YoY drop, while the highest quintile saw a smaller decline of 0.49%, suggesting that poorer households were more impacted by the recent price adjustments.

Despite ongoing inflationary pressures, Pakistan has been able to control inflation. Brokerage firm Topline Securities estimates that the Consumer Price Index (CPI) for March 2025 will decline to a three-decade low, with YoY inflation expected to be between 0.5% and 1.0%, marking a significant drop from the 27.06% recorded in the same period last year.