ISLAMABAD: Pakistan’s headline inflation reached 4.1% year-on-year (YoY) in July 2025, a notable rise from 3.2% recorded in June 2025, as per data released by the Pakistan Bureau of Statistics (PBS) on Friday.
On a month-on-month basis, inflation surged by 2.9% in July, compared to a modest 0.2% increase in June 2025 and a 2.1% rise in the same month of 2024.
The latest Consumer Price Index (CPI) reading is still significantly lower than the 11.09% recorded in July 2024. Inflation in Pakistan had reached a record high of 38% in May 2023 but has shown a steady downward trend since then.
The CPI reading is in line with the government’s expectations, as the Finance Ministry had projected inflation to ease to a range between 3.5% and 4.5% in July, driven by stable prices and improved supply conditions.
Despite the higher-than-expected inflation figure, the ministry remains optimistic about the country’s economic recovery, predicting continued growth in the early months of fiscal year 2026 due to a stronger macroeconomic environment and increased investor confidence.
Several brokerage houses, however, had expected inflation to fall even further. Ismail Iqbal Securities had forecast a reduction to 3.1% in July, noting a significant decline from last year’s July inflation rate of 11.1%.
Urban inflation saw a rise to 4.4% YoY in July 2025, up from 3.0% in June. Month-on-month, urban CPI increased by 3.4%, compared to 0.1% in the previous month and 2.0% in July 2024.
Rural inflation stood at 3.5% YoY in July 2025, slightly down from 3.6% in June. On a month-on-month basis, rural inflation rose by 2.2%, mirroring the increase seen in July 2024.
The overall CPI figure points to ongoing challenges with inflation, particularly in urban areas, though the government remains hopeful that price pressures will ease in the coming months.
