Inflation in Pakistan clocks in at 3% in August 2025
- CPI reading lower than government, market expectations
Headline Inflation YoY
Pakistan’s headline inflation clocked in at 3% on a year-on-year (YoY) basis in August 2025, a reading lower than that of July 2025, when it had stood at 4.1%, showed Pakistan Bureau of Statistics (PBS) data on Monday.
On a month-on-month basis, it decreased by 0.6% in August 2025, as compared to an increase of 2.9% in the previous month and an increase of 0.4% in August 2024.
Consumer Price Index (CPI) inflation average during July-August FY25 stood at 3.53%, as compared to 10.36% in 2MFY24.
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 lower than the government’s expectations.
The Finance Ministry in its monthly economic report expected inflation to “remain within the range of 4-5% in August, 2025”.
Moreover, the latest CPI reading was also lower than the projections made by several brokerage houses.
Insight Securities projected Pakistan’s headline inflation to clock in at 4.1% in August.
“Headline inflation is estimated at 4.1% for August 2025, as compared to 9.6% in the same period last year and 4.1% in the preceding month. On a month-on-month basis, inflation is expected to inch up by 0.4%, amid an increase in prices of food items, the impact of which has been negated by lower electricity charges and a decline in LPG price,” it said.
Urban, rural inflation
The PBS said CPI inflation urban increased by 3.4% on year-on-year basis in August 2025, as compared to 4.4% of the previous month and 11.7% in August 2024.
On a month-on-month basis, it decreased by 0.7% in August 2025, as compared to 3.4% in the previous month and an increase of 0.3% in August 2024.
CPI inflation rural, increased by 2.4% on year-on-year basis in August 2025, as compared to an increase of 3.5% in the previous month and 6.7% in August 2024.
On a month-on-month basis, it decreased by 0.5% in August 2025, as compared to an increase of 2.2% in the previous month and an increase of 0.6% in August 2024.