Health, Education Costs Soar Despite Low Overall Inflation in Pakistan

ISLAMABAD: While inflation in Pakistan reached a historic low of 0.3% in April FY2025, the Economic Survey 2024-25 revealed that health and education sectors continue to face significant price pressures, reflecting deeper cost-of-living challenges for citizens.

According to the survey, CPI inflation fell to an average of 4.7% during July–April FY2025, down sharply from 26% in the same period last year. However, inflation in Pakistan’s essential services remained elevated. Health costs surged by 14.5%, while education inflation stood at 11.6%, pointing to ongoing increases in medical services and tuition fees.

The trend underlines that even as food and energy prices eased, leading to a broad slowdown in inflation, critical sectors like healthcare and education became less affordable for the public. Clothing and footwear also saw high inflation at 14.4%, though it was a slight improvement from last year’s 19.8%.

April 2025 marked a record low in overall CPI, with inflation at just 0.3% — the lowest since 2015. This decline is attributed to improved food supply, declining global commodity prices, and a favorable base effect. Energy inflation remained subdued due to stable oil prices, a steady exchange rate, and contained electricity and gas tariffs.

The report projects that inflation will remain between 4.5–5% in FY2025, gradually normalizing through FY2026 and FY2027, supported by better agricultural output and improving economic conditions.

Regionally, South Asia saw varied inflation trends. India maintained stable inflation between 3.3% and 6.2%, while Bangladesh grappled with higher rates ranging from 9.0% to 11.7%. Sri Lanka experienced deflation, dropping to -2.0% in April 2025. Iran, however, continued to struggle with inflation above 30%.

Despite the broader relief, the cost escalation in healthcare and education underscores persistent structural issues in Pakistan’s inflation dynamics, demanding targeted policy responses to address essential service affordability amid overall economic stabilization.