Inflation in Pakistan clocks in at 4.1% in July 2025

Headline Inflation YoY

Pakistan’s headline inflation clocked in at 4.1% on a year-on-year (YoY) basis in July 2025, a reading higher than that of June 2025, when it had stood at 3.2%, showed Pakistan Bureau of Statistics (PBS) data on Friday.

On a month-on-month basis, it increased by 2.9% in July 2025, as compared to an increase of 0.2% in the previous month and an increase of 2.1% in July 2024.

Consumer Price Index (CPI) stood at 11.09% in July 2024.

Inflation in Pakistan has been a significant and persistent economic challenge, particularly in recent years. In May 2023, the CPI inflation rate hit a record high of 38%. However, it has been on a downward trajectory since then.

The CPI reading is in line with the government’s expectations.

The Finance Ministry in its monthly economic report expected inflation to ease to a range between 3.5-4.5% in July, citing stable prices and improved supply conditions, as price pressures ease further after the previous fiscal year’s sharp decline.

The ministry said the economy is expected to sustain its recovery in the early months of fiscal year 2026, underpinned by an improved macroeconomic backdrop and growing investor confidence.

However, the latest CPI reading was higher than the projections made by several brokerage houses.

Ismail Iqbal Securities projected Pakistan’s headline inflation to lower to 3.1% in July.

“Inflation for Jul’25 is projected at 3.1%, a sharp decline from 11.1% in the same period last year, indicating continued easing in price pressures,” said the brokerage house.

Urban, rural inflation

The PBS said CPI inflation urban increased to 4.4% on year-on-year basis in July 2025, as compared to 3.0% in the previous month and 13.2% in July 2024.

On a month-on-month basis, it increased by 3.4% in July 2025, as compared to 0.1% in the previous month and an increase of 2.0% in July 2024.

CPI inflation rural increased by 3.5% on year-on-year basis in July 2025, as compared to an increase of 3.6% in the previous month and 8.1% in July 2024.

On a month-on-month basis, it increased by 2.2% in July 2025, as compared to an increase of 0.5% in the previous month and an increase of 2.2% in July 2024.