KARACHI: The National Consumer Price Index (NCPI) for February 2025 is projected to decline by 0.3% month-on-month (MoM), primarily due to a significant drop in perishable food prices. However, core inflation remains at 8.8% year-on-year (YoY), signaling persistent cost pressures despite short-term relief.
In a joint statement, S.M. Tanveer, Patron-in-Chief of the United Business Group (UBG), and Faraz-ur-Rehman, Founder & Chairman of Pakistan Business Group (PBG), emphasized that while inflation appears to be stabilizing, structural challenges in the economy require urgent policy interventions to sustain long-term price stability.
Key Inflation Insights for February 2025:
NCPI expected at 2.1% YoY in February, remaining soft due to base effects and stable prices.
Food & Non-Alcoholic Beverages projected to drop by -1.1% MoM, led by price declines in potatoes (-55%), onions (-28%), and tomatoes (-21%).
Utility prices remain stable, with no new QTA charges and a PKR 0.47/kWh decrease in Fuel Cost Adjustments (FCA).
Petrol prices increased by 0.9% MoM, and diesel rose by 2.4% MoM due to exchange rate adjustments.
?Retail LPG prices dropped by 7.4% MoM, providing some relief to households and businesses.
Policy Recommendations by UBG & PBG:
Reduce interest rates to 8% to stimulate economic growth and ease financing costs.
Lower electricity tariffs to 9 cents per unit to stabilize essential commodity prices and support industries.
Ensure a stable food supply chain to prevent inflationary spikes, especially with Ramadan approaching.
Monitor fuel price movements to control excessive increases in transportation and logistics costs.
5??Support local agriculture to reduce dependence on imports and minimize food price volatility.
Inflation Outlook & Economic Stability
NCPI is expected to fall further below 1% YoY in March 2025 due to the base effect. However, inflation may rise post-Ramadan as global economic trends take effect. The FY25 inflation rate is projected to remain within the State Bank of Pakistan’s 5-7% target, provided energy and policy stability continue.
Call to Action by Business Leaders
S.M. Tanveer and Faraz-ur-Rehman stressed that while inflationary pressures have eased, deeper economic reforms are needed. They urged policymakers to focus on reducing financing costs, improving energy affordability, and strengthening domestic production to sustain long-term price stability.
“Now is the time to take proactive steps for economic stability and business-friendly policies,” they stated.
