Pakistan’s Inflation Rate Rises in July 2025

Data released by the Pakistan Bureau of Statistics (PBS) on Friday revealed that 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 indicated a month-on-month increase of 2.9% in July 2025, contrasting with a 0.2% rise the previous month and a 2.1% increase in July 2024.

For context, the Consumer Price Index (CPI) stood at 11.09% in July 2024.

Inflation has posed a considerable economic hurdle for Pakistan, especially in recent years. The CPI inflation rate peaked at 38% in May 2023 but has been decreasing since.

The latest CPI reading aligns with governmental forecasts.

The Finance Ministry’s economic report projected inflation to fall between 3.5% and 4.5% in July, attributing this to stable pricing and improved supply dynamics following the previous fiscal year’s significant decline.

The ministry anticipates sustained economic recovery in the early months of fiscal year 2026, driven by a better macroeconomic environment and increased investor confidence.

However, the recent CPI figure exceeded projections from several brokerage firms.

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

The brokerage firm noted that an expected inflation rate of 3.1% for July 2025 would reflect a substantial decrease from the 11.1% recorded during the same period last year, which signals a continuous decline in price pressures.

Urban and Rural Inflation Rates

The PBS detailed that urban CPI inflation rose to 4.4% year-on-year in July 2025, in comparison to 3.0% in the prior month and 13.2% in July 2024.

Month-on-month, urban inflation grew by 3.4% in July 2025, versus 0.1% the previous month and a 2.0% increase in July 2024.

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

On a month-on-month basis, rural inflation went up by 2.2% in July 2025, relative to a 0.5% increase in the prior month and a 2.2% increase in July 2024.