Pakistan’s Inflation Anticipated to Slightly Decrease in June 2025

Following a marginal increase to 3.5% year-over-year in May, Pakistan’s primary inflation rate is projected to experience a slight decline, settling at 3.1% in June, according to a report from JS Global, a brokerage firm.

Official data from the Pakistan Bureau of Statistics (PBS) indicated that Pakistan’s headline inflation reached 3.5% on an annual basis in May 2025. This figure surpassed April 2025’s rate of 0.3%.

JS Global stated, “After a 3.5% year-over-year figure in May 2025, the Consumer Price Index (CPI) is anticipated to be 3.1% year-over-year in June 2025. The base effect is now diminishing, which suggests a return to more typical price movements.”

The brokerage house added that this would bring the average inflation for fiscal year 2025 down to 4.6%, a substantial decrease from the 23.9% average recorded in fiscal year 2024.

It is worth noting that Pakistan’s inflation rate peaked at a record 38% year-over-year in May 2023. This was the highest level observed since records began in July 1965.

JS Global projects that food inflation will increase by 2.8% year-over-year in June. This is compared to the 0.97% rise seen last year, primarily due to the weakening of the base effect.

“Nevertheless, price reductions in specific food items are anticipated to cause a month-over-month decrease in food inflation. Housing, Gas, and Electricity are expected to show a 4% year-over-year drop in June 2025, mainly because of reduced electricity costs,” the firm projected.

Core inflation, excluding food and energy, is expected to be around 8.5% year-over-year in June.

Furthermore, JS Global noted that the State Bank of Pakistan (SBP) decided to keep the policy rate at 11% during the Monetary Policy Committee (MPC) meeting held earlier in the week.

The report also pointed out that the policy rate has been lowered by a total of 1,100 basis points from June 2024 to June 2025, falling from a high of 22% to 11%.

JS Global stated, “The MPC highlighted potential disruptions in global supply chains and an uncertain outlook for global commodity prices as the main risks.”

The SBP is scheduled to convene in July 2025 for its next MPC meeting.