The Sensitive Price Index (SPI) for the week ending March 13, 2025, recorded a 1.97% decrease on a year-on-year (YoY) basis, according to the Pakistan Bureau of Statistics (PBS).
This marks the lowest YoY inflation recorded since the available data began. The decline is primarily attributed to the significant reduction in essential commodity prices, including onions, tomatoes, wheat flour, and fuel.
However, on a week-on-week (WoW) basis, SPI inflation increased slightly by 0.22%, due to the rising prices of tomatoes, chicken, and sugar. This mixed trend highlights the ongoing fluctuations in Pakistan’s economic conditions.
Year-on-Year SPI Decline – Key Contributing Factors
According to Arif Habib Limited (AHL), the historic decline in SPI-based inflation stems from massive price drops in several essential commodities:
- Onions – Decreased by 72.32%
- Tomatoes – Declined by 51.96%
- Wheat Flour – Down by 36.20%
- Chilies Powder – Reduced by 20.00%
- Electricity Charges (Q1) – Dropped by 18.92%
- Tea (Lipton Brand) – Down by 15.89%
- Pulse Mash – Declined by 14.98%
- Pulse Masoor – Reduced by 12.38%
- Diesel – Down by 9.91%
- Petrol – Declined by 8.55%
- LPG (Liquefied Petroleum Gas) – Dropped by 5.35%
These price reductions contributed significantly to the overall decrease in the SPI, indicating improved economic stability and a potential easing of inflationary pressures.
Week-on-Week SPI Increase – Rising Costs of Essentials
Despite the year-on-year decrease, week-on-week inflation rose slightly by 0.22%, driven by the increased costs of specific food and utility items:
- Tomatoes – Up by 36.43%
- Chicken – Increased by 6.40%
- Bananas – Rose by 6.05%
- Sugar – Climbed by 5.69%
- LPG – Up by 1.44%
- Georgette & Gur – Both increased by 1.32%
- Bread – Higher by 1.13%
- Beef – Slight increase of 0.57%
- Pulse Moong – Rose by 0.28%
- Cigarettes – Increased by 0.27%
Although the overall impact on inflation remains limited, the short-term increase in essential commodities may still impact household budgets, particularly for lower-income groups.
Analysis of 51 Essential Commodities
During the week, PBS monitored the prices of 51 essential commodities, revealing the following trends:
- 12 items (23.53%) – Prices increased
- 15 items (29.41%) – Prices decreased
- 24 items (47.06%) – Prices remained stable
This balanced distribution suggests that inflationary pressure is stabilizing, although short-term price hikes in specific food items remain a concern.
Impact on Pakistan’s Economy
The decline in SPI-based inflation aligns with Pakistan’s broader economic trends. Recent figures indicate a steady drop in the Consumer Price Index (CPI) as well, reinforcing macroeconomic improvements:
- January 2025 CPI Inflation – Dropped to 2.41%, the lowest in over nine years
- December 2024 CPI Inflation – Recorded at 4.1%
- January 2024 CPI Inflation – A staggering 28.3%
The Finance Ministry projects inflation to remain stable between 2.0% and 3.0% in February 2025, with Short-Term a possible increase to 3.0%-4.0% in March 2025 due to seasonal price variations.
