Friday , April 4 2025

Inflation drops to three-decade low as trade deficit rises

The monthly inflation rate in March has remained below one percent, while the trade deficit recorded an increase, said an official data released by Pakistan Bureau of Statistics on Thursday.

During the first nine months of the current fiscal year, both exports and imports saw a rise alongside the growing trade deficit. The data released by the Federal Bureau of Statistics reveals that the trade deficit increased by 4.50 percent, climbing from $17.13 billion to $17.90 billion.

The report further highlights a significant growth in Pakistani exports, which rose by 7.69 percent, increasing from $22.93 billion to $24.69 billion. Similarly, imports experienced a 6.33 percent increase, growing from $40.05 billion to $42.59 billion.

In March 2025, exports witnessed a modest growth of 1.95 percent, rising from $2.57 billion to $2.62 billion. Conversely, imports saw a decline of 2.45 percent, dropping from $4.86 billion to $4.74 billion.

Inflation Trends

For the second consecutive month, inflation in the country remained below the estimates projected by the Ministry of Finance. In March, the annual inflation rate continued its downward trajectory, reaching 0.96 percent.

The Bureau of Statistics, in its monthly inflation report, stated that the annual inflation growth rate in February 2025 was recorded at 1.52 percent. The average inflation rate from July to March stood at 5.25 percent. Compared to February, inflation in March increased by 0.89 percent.

Further analysis revealed that inflation in urban areas rose by 0.78 percent, whereas in rural areas, it saw a slightly higher increase of 1.05 percent. In March, the overall inflation rate in cities was recorded at 1.16 percent, while in rural areas, it remained minimal at 0.02 percent.

A report from brokerage firm Topline Securities noted that the annual inflation rate in March 2025 had declined to 0.7 percent, marking the lowest level in three decades. The firm further highlighted that in February 2025, inflation stood at 1.5 percent, while during the first nine months of the 2025 fiscal year, the average inflation growth rate was recorded at 5.25 percent. This is a significant drop compared to the 27.06 percent inflation rate recorded during the same period in the previous fiscal year.

Notably, the Ministry of Finance had projected the inflation rate for March to be between 3 and 4 percent.

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