The Sensitive Price Indicator (SPI) for the week ended March 27, 2025 recorded a week-on-week (WoW) decrease of 0.15% and a year-on-year (YoY) decline of 1.26%.
The SPI, which is calculated on a weekly basis to monitor price movements of essential commodities over short intervals, allows a timely review of the country's inflationary situation. The index cover 51 essential items, with data collected from 50 markets across 17 cities.
For the week ended March 27, the SPI recorded a slight decrease of 0.15%. The most significant price declines were observed in onions (4.68%), bananas (4.27%), eggs (3.87%), garlic (2.23%), potatoes (1.47%), chicken (1.29%), sugar (0.94%), and pulse gram (0.67%).
Conversely, price increases were noted in tomatoes (9.62%), LPG (1.17%), lawn printed fabric (0.62%), pulse mash (0.56%), gur (0.51%), beef (0.30%), long cloth (0.29%), pulse masoor (0.20%), mustard oil (0.13%) and 2.5kg vegetable ghee (0.10%).
Among the 51 items monitored, prices of 10 items (19.61%) increased, 10 items (19.61%) decreased while 31 items (60.78%) remained stable.
On a YoY basis, the SPI showed an overall decrease of 1.26%. Notable price declines were recorded for onions (68.64%), wheat flour (33.33%), chilli powder (20%), Q1 electricity charges (18.92%), Lipton tea (16.98%), pulse mash (13.35%), tomatoes (12.08%), pulse masoor (11.21%), Basmati broken rice (9.51%), diesel (9.37%), petrol (8.55%) and LPG (1.82%).
In contrast, significant price increases were observed in ladies' sandals (75.09%), pulse moong (27.22%), powdered milk (25.75%), beef (21.37%), sugar (18.12%), pulse gram (17.71%), 1kg vegetable ghee (16.36%), 2.5kg vegetable ghee (15.66%), lawn printed fabric (12.97%), cooked daal (12.77%), shirting (11.57%) and georgette fabric (11.20%).
Overall, inflation for March 2025 is projected at 0.6%, marking a sharp decline from 20.7% in the same period of last year, according to Ismail Iqbal Securities. This indicates a significant relief in price pressures.
On a month-on-month (MoM) basis, inflation is expected to increase by 0.86%, following a decline of 0.83% in February 2025. The increase is primarily driven by rising prices of tomatoes (22.2%), chicken (9.9%), sugar (9.2%), eggs (8.8%) and fresh fruits. As a result, the overall food inflation is anticipated to rise by 1.4% MoM.
Core inflation is projected to ease to 9.1% from 15.7% last year, with urban core inflation at 8.4% and rural core inflation at 10.1%. The sharp decline is attributed to a high base effect and improved price stability.
However, the rural core inflation remains relatively high due to persistent challenges such as supply chain inefficiencies and higher transportation costs.
The State Bank of Pakistan (SBP) has kept its policy rate unchanged at 12%, pausing after a 1,000-basis-point (bps) cut to assess its impact on inflation and macroeconomic stability. The monetary policy committee highlighted risks from the elevated core inflation and potential increases in food and energy prices. Additionally, the government has raised the petroleum development levy by Rs10 per litre.
The International Monetary Fund has emphasised the need for continued monetary tightening, stating that the full impact of recent rate cuts is yet to materialise.
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