Pakistan’s Inflation Rate Rises in July 2025

According to data released by the Pakistan Bureau of Statistics (PBS) on Friday, Pakistan’s headline inflation reached 4.1% year-on-year (YoY) in July 2025. This is an increase compared to the 3.2% recorded in June 2025.

The data indicates a month-on-month increase of 2.9% in July 2025, which is notably higher than the 0.2% increase in the prior month and the 2.1% increase observed in July 2024.

In July 2024, the Consumer Price Index (CPI) was recorded at 11.09%.

Inflation has posed a significant and ongoing economic hurdle for Pakistan, particularly in recent years. The CPI inflation rate peaked at 38% in May 2023, but has since been on a declining trend.

The latest CPI reading aligns with the government’s projections.

The Finance Ministry’s monthly economic report anticipated inflation to fall between 3.5% and 4.5% in July, attributing this to stable prices and improved supply conditions, which are expected to further alleviate price pressures following the steep decline in the previous fiscal year.

The ministry anticipates that the economy will continue its recovery in the early months of fiscal year 2026, supported by a better macroeconomic environment and increasing investor confidence.

However, the most recent CPI figure surpassed the forecasts made by several brokerage firms.

Ismail Iqbal Securities had projected a headline inflation rate of 3.1% for Pakistan in July.

The brokerage house stated that inflation for July 2025 is projected at 3.1%, a significant decrease from the 11.1% recorded during the same period last year, which suggests a continued easing of price pressures.

Urban and Rural Inflation

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

On a month-on-month basis, urban inflation rose by 3.4% in July 2025, compared to 0.1% in the prior month and 2.0% in July 2024.

Rural CPI inflation saw an increase of 3.5% year-on-year in July 2025, in contrast to a 3.6% increase in the preceding month and 8.1% in July 2024.

Month-on-month, rural inflation increased by 2.2% in July 2025, versus a 0.5% increase in the previous month and 2.2% in July 2024.