Torkham border point closure continues
I Security forces neutralize 13 terrorists in North Waziristan
PR Explainer
Inflation reaches a decade low: Why and What next?
Rohini Reenum
What happened?
On 3 March, according to the Pakistan Bureau of Statistics (PBS) data, Pakistan’s rate of inflation reduced to 1.5 per cent year-on-year in February. This is also the lowest rate since November 2015, marking a historic, almost ten-year low. The headline inflation, which is calculated based on the Consumer Price Index (CPI) also declined by 0.8 per cent month-on-month in February. The urban inflation also declined to 1.8 per cent year-on-year as compared to January when it was recorded at 2.7 per cent. Similarly, the rural inflation also decreased to 1.1 per cent as compared to 1.9 per cent in January.
Reacting to the above, PM Shehbaz Sharif expressed his contentment and said “This is very good news on this occasion as the current government completes its first year.” Notably, he pinned this success on the efforts taken by his economic team and expressed further optimism stating “I strongly hope that inflation will decrease further.
What has been Pakistan’s inflation background?
High inflation has been a key economic challenge for Pakistan for at least the last few years. This is exemplified by the fact that CPI inflation crossed the 10 per cent mark in November 2021 and “remained in double digits for the next 33 consecutive months.” It is important to note that the CPI inflation rate has, however, been on the decline since May 2023 when it had reached an all time high of 38 per cent. This surge was primarily fueled by “unprecedented food and energy prices.” The first time the CPI inflation returned to a single digit was in August 2024 when it was recorded at 9.6 per cent. Notably, the current decline in inflation rate has surpassed government (Finance Ministry) expectations which had projected the inflation rate “to remain between 2 per cent and 3 per cent” in February. According to Business Recorder, the current inflation rate is even lower than that expected by “several brokerage houses.”
In February, what led to the decline in inflation rate?
According to Dawn, the primary reason for the fall in the rate of inflation is the decline in prices of “perishable” food items, mainly “wheat and its by-products.” It expanded that this decline is also driven by lower prices of other perishable items “like onions, certain pulses, and a slight reduction in electricity charges.” This is because even a slight change in the prices of these products impacts the overall inflation rate as “these products hold significant weight in inflation calculations.” However, both Dawn and The Express Tribune pointed out how except wheat, its by-products, onion and tomatoes, prices of other kitchen essentials like sugar and edible oil continue to be high. This is despite the prices of sugar and edible oil being lower in the international market.
The second reason for this decline is what economists call the base effect. The current decline is sharp because of the high base effect as compared to last year February when it was recorded at 23.1 per cent year-on-year basis.
What does this mean?
When only the rate of inflation declines, as opposed to a general and persistent decline in prices of goods, the economy is said to be going through a period of disinflation. Alternatively, this situation can be described as “a slowdown in inflation.” What is important to note that this “does not indicate a reduction in the cost of living.” Hence, the benefit of this price decrease does not necessarily trickle down to the common people or improve their standard of living/improve their purchasing power. Separately, it is important to note that the Finance Ministry has projected the inflation rate to remain between 3 per cent and 4 per cent by March. This decline, however, is a win for macroeconomic indicator health and is sure to buy the country favor with the IMF, especially when the first review is underway. Second, it is also likely to boost investor confidence. Third, this will likely be a key factor in deciding the key interest rate when the Monetary Policy Committee (MPC) of the SBC meets on 10 March. Fourth, it will help the incumbent government’s image whose first year has been marred by political and economic protests.
References
Mubarak Zeb Khan, “Inflation drops to lowest in nearly a decade,” Dawn, 4 March 2025
Shahbaz Rana, “Inflation slows to 1.5% in Feb,” The Express Tribune, 4 March 2025
Mateen Haider, “PM claims credit as inflation drops to 1.5pc,” The Nation, 4 March 2025
“Pakistan's CPI inflation drops to historic 1.5%,” Radio Pakistan, 4 March 2025
“Inflation in Pakistan clocks in at 1.5% in February 2025,” Business Recorder, 3 March 2025
In Brief
POLITICS
PM Sharif to review cabinet performance on one-year completion
On 4 March, Dawn reported that Prime Minister Shehbaz Sharif will review the performance of his cabinet members at a special gathering held at the Jinnah Convention Hall on the completion of one year. The event will be attended by media persons, businessmen, and high-achieving youth. A source reported by Dawn highlighted that the PM could select a minister at random and ask them to provide a performance review of their ministry. While speaking at a press conference, Information Minister Attaullah Tarar highlighted PM Sharif’s completion of one year in power. He claimed that the government brought about a “remarkable turnaround” by stabilizing the economy and charting its “path of growth.” (Syed Irfan Raza, “Shehbaz to review govt’s one-year performance today,” Dawn, 4 March 2025)
JUDICIARY
Counsel urges constitutional bench to transfer trial of 9 May accused to ATC
On 4 March, Dawn reported on the ongoing hearings of the intra-court appeals against the 23 October Supreme Court decision, which nullified the military trial of civilians involved in the 9 May violence. While speaking at the constitutional bench hearing, Faisal Siddiqi, who represented a civil society, called for the transfer of cases against the 9 May civilians to the Anti-terrorism court (ATC). He believed the cases filed against those with maximum sentences should be transferred to the ATC if the military trials were declared invalid. He added that cases where convicts have completed their punishments should be declared as “past and closed transactions.” If such a suggestion was implemented, Justice Muhammad Ali Mazhar questioned whether fresh trials would be conducted on those convicted in the 9 May episode. He inquired whether the ATC can treat the evidence gathered by the military courts as credible. In response, Siddiqi argued that he was seeking a limited fresh trial by the ATC for those who have been sentenced for six to 10 years. The bench, led by Justice Aminuddin Khan, also posed a question. He asked whether the counsel challenged section 94 of the Pakistan Army Act (PAA), where the mandated officer decides whether a case must be tried in a civilian or military court. To this, the counsel replied that the offence under the PAA was not determined when the accused was taken into custody. In this regard, he challenged the unlimited powers of the officer in his petition. He argued: “The authority of the officer who decides the transfer of custody to military courts should not be unlimited,” when the prime minister himself has limitations to his power. (Nasir Iqbal, “SC Constitutional Bench urged to send civilians’ cases to ATCs,” Dawn, 4 March 2025)
SOCIETY
On the politicization of polio:
“Only through acknowledging every case — mild or severe — can we develop targeted strategies to finally put polio behind us,” argues an editorial in Dawn
On 4 March, an editorial titled “Polio politics” in Dawn emphasized the need for the provinces of Pakistan to accept reality highlighted by scientific findings instead of acting out in defense. It cited the recent detection of a polio case in Punjab by the National Institute of Health. However, the provincial officials have rejected the reports, stating that it did not meet the clinical criteria for polio. As one of the two countries battling with polio, Pakistan’s authorities have failed to understand the nature of the disease. Mild cases may exist among children who retain mobility. It may be considered a sign of progress in immunization efforts and a success of the existing surveillance systems. Hence, a “scientific approach must prevail over political considerations and provincial pride.” It underscored the need to accept “hard facts” and not resort to immediate denial. After which unity must be established between the center and the provinces. The center ought to communicate “test results and diagnostic criteria” transparently, while provinces should set aside their defensiveness and accept scientific findings. The editorial read: “This requires putting aside jurisdictional disputes and embracing collaborative action.” (“Polio politics,” Dawn, 4 March 2025)
52,520 Pakistanis banned from travelling: FIA statement
On 3 March, the Federal Investigative Agency (FIA) revealed that the government has imposed travel restrictions to the US, the UK, and the Middle East on more than 52,000 Pakistanis. This objective is to combat human smuggling and illegal migration. The FIA disclosed that about 52,520 Pakistanis have been involved in illegal migration, criminal activities, and deportation. To ensure compliance, the Directorate of Passport and Immigration has listed their passports on the Passport Control List (PCL) to prevent them from leaving the country. According to a list received by the FIA, a large number of Pakistanis have been deported from the UAE and Saudi Arabia for their alleged involvement in crime and begging while others have served sentences in jail. (“Crackdown on human smuggling: Over 52,000 barred from travelling abroad,” The News International, 4 March 2025)
Alarming levels of crimes committed against religious minorities: HRCP report
On 4 March, The News International highlighted a new report released by the Human Rights Commission of Pakistan titled “Under Siege: Freedom of Religion or Belief in 2023/24.” The report illustrates alarming rates of mob-driven and state-motivated violence against religious minorities like the Ahmadis. It further highlighted patterns of systemic violence against Ahmadis through the desecration of graves, arbitrary arrests, and crackdowns on their religious practices. Additionally, the report identified the exploitation of blasphemy laws by law enforcement personnel against Ahmadis. (“Religious minorities’ situation alarming: HRCP,” The News International, 4 March 2025)
ECONOMY
Punjab government to install solar panels free of cost in households
On 3 March, CM of Punjab Maryam Nawaz set out the “free solar panel scheme.” The beneficiaries of the scheme would be those households who use less than 200 units a month. As per the scheme, eligible households can request for free installation of “solar systems.” To avail the scheme more than 800,000 people have applied. Maryam Nawaz has instructed the concerned authorities to speed up the finalization of “solar panel installation.” On the scheme, which is expected to benefit thousands of households, she said “we want to provide maximum relief to the people from expensive electricity, and there should be no delay in this regard.” The concerned authorities told Maryam Nawaz that the installation process would begin only from the end of March and the first phase would be finalized by the end of July. On expanding the use of solar energy to move towards cleaner sources of fuel, Maryam Nawaz claimed that “installing 100,000 solar systems in Punjab will reduce the carbon emissions by 57,000 tons. (Zulqernain Tahir, “Free solar panel scheme formally launched in Punjab,” Dawn, 4 March 2025)
Negative growth in exports of merchandise during February
On 3 March, the Pakistan Bureau of Statistics informed that “exports of merchandise” have dropped by 5.57 per cent in February. This was the first time that the growth went into negative. The trend started from November 2024, when the growth was recorded in the “single digit.” As per experts, the growth rate often drops from “November to January.” The growth in the export of merchandise started to pick up from July 2024. The reasons behind the surge in growth were attributed to “improved orders” and stable foreign exchange rates. In July, the growth in exports was recorded to come at 11.83 per cent. This number was 16 per cent in August. It came down to 13.52 per cent in September. In October, it was 10.64 per cent. In November, it further came down to 8.98 per cent. In December, it was recorded to be 0.76 per cent, and in January 2025, it was 4.59 per cent. As per PBS, the imports also surged in the July financial year 2025 to USD 37.81 billion. For the same period, FY 2024, this number was USD 35.19 billion. As a result, in “July-February FY 2025,” the trade deficit also surged by 6.33 per cent, which amounts to USD 15.87 billion.
(Mubarak Zeb Khan, “Exports shrink 5.5 pc in February,” Dawn, 4 March 2025)
Petroleum association cancels plans to hold strike after receiving assurances from government about derogation of oil prices
On 3 March, All Pakistan Petroleum Dealers Association called off their strike (APPDA). This came after the Petroleum Division vowed that their “sale margins” will not be impacted by “pricing deregulation.” APPDA had earlier informed about their plans to go on a nationwide strike on 4 March. The strike was announced as the government is looking to deregulate prices of oil, however, it has not discussed the same with concerned “stakeholders.” On 3 March, Minister of Petroleum Musadik Malik held a meeting with several “petroleum dealers.” As per Noman Butt who is the leader of APPDA, discussion with the government proved to be fruitful. He also informed that the petroleum minister has vowed to take all the concerned “stakeholders” on board for combating the “smuggling of oil products” from Iran. (“Petroleum dealers call off strike,” Dawn, 4 March 2025)
IMF urges government to clamp down on tax evasion in real estate
On 3 March, The Express Tribune reported on the International Monetary Fund’s demand to clamp down on “tax evasion” in the “real estate sector” of the country. This comes amid the talks of disbursing a “USD one billion loan tranche.” Islamabad has pledged to reinvigorate the “Real Estate Regulatory Authority” (RERA) to look into the problem of “tax evasion.” The concerned authorities intend to initiate strong action against people who are found to mention “false property values.” The culprits are likely to face “imprisonment and fines.” Agents who do not register their properties are likely to incur “fines up to” PKR 500,000, whereas the ones who declare “false information” are likely to incur fines ranging from PKR 200,000 to PKR 500,00. RERA would also be authorized to enforce “prison sentences up to three years.” (“IMF pushes for crackdown on tax evasion in Pakistan’s real estate sector,” The Express Tribune, 3 March 2025)
On Pakistan being unable to meet IMF’s tax targets:
“Officials are confident that the IMF will ignore the slippages because of a higher than targeted primary budget surplus,” says an editorial in Dawn
On 4 March, an editorial in Dawn titled “IMF scrutiny,” discussed the economic situation of Pakistan amid the International Monetary Fund reviewing the progress in the economy. The editorial mentions that the officers are confident of fulfilling all the requisites demanded by the IMF. However, the editorial notes that concerns regarding not being able to fulfill the IMF’s “tax target” continue to remain. The editorial states that the officers are optimistic as, according to them, the surge in “revenue-to-GDP ratio” and “budget surplus” would offset their failure to comply with the “tax target.” The editorial highlights the reasons given by the Federal Board of Revenue, such as a fall in revenue collection from imports, inadequate growth in Large-scale manufacturing, and the sudden fall in inflation for not being able to meet the tax target. The editorial mentions the positive side of Pakistan’s current economy, such as stability seen in the value of the rupee, inflation coming down to 1.4 per cent, surplus in the current account, and record growth in remittances. The editorial gives the credit for this to the financial assistance received from the IMF. (“IMF scrutiny,” Dawn, 4 March 2025)
SECURITY
Terrorists neutralized by security forces were found to hail from Afghanistan
On 28 February, security forces neutralized 14 terrorists at the Pakistan-Afghan border. Among the 14 terrorists who were killed, one named Mujeebur Rehman hailed from Afghanistan. As per the sources, Mujeebur was “commander of third battalion at Afghanistan’s National Military Academy. Separately, on 30 January, a terrorist hailing from Afghanistan named Badruddin was neutralized by security forces. Badruddin was a “lieutenant in the Afghan army.” This comes amid Pakistan repeatedly raising concerns regarding Afghanistan harboring anti-Pakistan terrorists. Pakistan has, time and again, demanded that the Taliban government not allow terrorists to perpetrate on their lands. Pakistan’s claims have been substantiated by a “report to UN Security Council” which was formulated by the Analytical Support and Sanctions Monitoring Team, which confirms the links between the Afghanistan government and Tehreek-e-Taliban Pakistan. (“Afghan commander involved in terrorism killed in Pakistan,” The News International, 4 March 2025)
Security forces neutralize 13 terrorists in North Waziristan
On 3 March, a skirmish between militants and security forces resulted in the killing of four security personnel in North Waziristan. Also, 13 militants who were involved in carrying out assaults at “security check posts” were neutralized by the security forces. Inter Services Public Relations has yet to comment officially on the assault. There has been a recurring trend of facing assaults by the security forces from militants in North Waziristan. Previously, on 24 February, an assault on a security checkpoint in North Waziristan resulted in the killing of four security personnel. (Pazeer Gul, “Four security men martyred in North Waziristan attack,” Dawn, 4 March 2025)
PAKISTAN OCCUPIED KASHMIR
Gilgit Baltistan: Protests erupt over arrest of three scholars of Iranian institution
On 3 March, demonstrations were held in various regions of Gilgit Baltistan in protest against the arrest of three religious scholars on their return from Iran to Pakistan. A sit-in has been staged for the third consecutive day in the Kharmang district. Another demonstration was being staged in the Shigar district. The protestors stated that the arrested scholars Sheikh Ghulam Abbas of Skardu, Syed Aga Ali Abbas from Kharmang, and Sheikh Akhtar Hussain of Shigar were students at a religious institution in Iran while demanding their release. The protestors denounced the arrests as they were unjustified without any crime committed. They were allegedly detained by the police when they arrived at the Rimdan-Gabd border on 25 February. In the meantime, the Anjuman-i-Imamia Baltistan terror group has announced that the protest will heighten if the scholars are not released. (“Protests in Baltistan over arrest of three religious scholars,” Dawn, 4 March 2025)
AF-PAK
Torkham remains closed amid border tensions
On 3 March, the Pakistan Torkham border remained closed for the 11th consecutive day amid intensified clashes between the security personnel on both sides. According to sources reported by The News International, three personnel sustained injury during a cross-border firing at 0200 hours. Pakistani and Afghan personnel employed heavy weapons while targeting one another. This forced the residents living near both sides to flee their homes in the Bacha Maina village and even triggered a stampede. On 2 March, eight people, including six security personnel, reported injury after Pakistan and Taliban security exchanged fire at the border. Quoting the Afghan interior ministry, a Reuters report indicated that one was killed, while two others sustained injury on the Taliban side. Sources reported by Dawn highlighted that the firing started around 2400 hours, with both sides first using light weapons and eventually turning to heavy weaponry. The shooting caused damage to several infrastructures and stopped around 1100 hours. These developments come as the Torkham border was abruptly closed on 21 February after the Afghan side started its construction activities on the border. This has resulted in a halt in trade activities and movement across both countries, causing millions of losses. (Ashrafuddin Pirzada, “Pak, Afghan forces trade fire at Torkham,” The News International, 4 March 2025; Ibrahim Shinwari, “Torkham tensions mount as forces trade fire,” Dawn, 4 March 2025)
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"Politics is alive in this country because of Imran Khan; otherwise, if Imran Khan had bowed down, politics would have been buried in this country. Politics is alive because of the political workers who are in prison or those who have taken bullets and made sacrifices"
Allama Raja Nasir Abbas
- PTI
Plaques have been erected in this country, but a plaque should be erected for the murder of the constitution, a plaque for the burial of justice should be erected outside the Constitutional Court, a plaque for the burial of the constitution should be erected outside the Parliament, a plaque for the end of democracy should be erected.
Kashif Abbasi
-PTI Khyber Pakhtunkhwa
It has been nine years since the arrest of Indian spy Kulbhushan Jadhav, who is responsible for terrorism in Pakistan. The flag of Pakistan and the morale of the Pakistani army and people who sacrificed their lives to protect the holy land are high.
- Attaullah Tarar
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"The government let its jitters turn a low-profile event into a successful effort of resistance."
An opinion in Dawn, 'Is all well?'
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