Pakistan’s Inflation Clocks in at 4.1% in July 2025
Pakistan’s annual inflation rate rose to 4.1% in July 2025, according to fresh data released by the Pakistan Bureau of Statistics (PBS). This marks a significant change compared to 3.2% in June 2025 and a considerable decline from the 11.1% recorded in July 2024.
The recent data highlights changing economic trends, especially in Consumer Price Index (CPI), Sensitive Price Index (SPI), and Wholesale Price Index (WPI), reflecting the effects of fiscal policies and global market conditions. The inflation outlook is a crucial metric for investors, businesses, and policymakers monitoring Pakistan’s economic recovery.
Annual and Monthly Inflation Overview
On a year-on-year (YoY) basis, Pakistan’s national inflation increased by 4.1% in July 2025. In comparison, the inflation rate was 3.2% in June 2025, while July 2024 saw a much higher inflation rate of 11.1%, highlighting a notable easing in the annual inflation trajectory.
However, on a month-on-month (MoM) basis, the inflation rate rose by 2.9% in July 2025. This is a sharp spike compared to the 0.2% increase in June 2025 and the 2.1% increase in July 2024, indicating rising short-term price pressures.
These figures suggest that while inflation has moderated significantly over the past year, monthly price hikes are picking up again, raising concerns about domestic price stability.
Urban Inflation: Rising Cost of Living in Cities
In urban areas, CPI inflation increased to 4.4% year-on-year in July 2025, up from 3.0% in June 2025. This is still a sharp decrease compared to the 13.2% inflation in urban areas in July 2024, indicating progress in controlling urban cost pressures over the past year.
However, on a monthly basis, urban inflation rose by 3.4%, up significantly from the 0.1% increase last month, showing a sudden uptick in the urban cost of living. The increase may be attributed to fuel price adjustments, utility tariffs, and food prices in major cities.
Urban inflation is a key metric watched by analysts, especially due to its impact on salaried classes, middle-income households, and urban consumption patterns.
Rural Inflation: Steady but Noticeable Growth
In rural regions, inflation clocked in at 3.5% on a year-on-year basis in July 2025. This is slightly lower than the 3.6% seen in June 2025 and significantly below the 8.1% recorded in July 2024.
On a month-on-month basis, rural inflation rose by 2.2% in July 2025, up from 0.5% in June 2025, mirroring the overall national inflation trend. Although rural areas generally have lower inflation compared to urban centers, the sudden monthly spike may signal rising agricultural input costs, transportation expenses, and essential commodity prices.
This trend could affect farmers, laborers, and rural households that have limited financial buffers to absorb rapid price increases.
SPI Index: Temporary Decline Followed by Sharp Monthly Increase
The Sensitive Price Index (SPI), which reflects the weekly price movement of essential commodities, declined by 0.9% year-on-year in July 2025. This is an improvement from the 1.9% drop in June 2025, and a sharp contrast to the 15.7% increase recorded in July 2024.
However, on a month-on-month basis, SPI surged by 3.1% in July 2025. There was no change in SPI in June 2025, making this sudden rise notable. In July 2024, the SPI had increased by 2.0%.
The SPI surge reflects increased household expenses, particularly for essential items like wheat, sugar, ghee, pulses, and cooking oil, which are heavily weighted in the index and affect lower-income groups most.
WPI Index: Wholesale Market Sees Mixed Signals
The Wholesale Price Index (WPI), a measure of price changes at the wholesale level, showed a YoY decrease of 0.5% in July 2025. This contrasts with a 0.6% increase in June 2025 and a 10.4% surge in July 2024, suggesting easing supply-side inflationary pressures.
However, on a MoM basis, the WPI rose by 1.2% in July 2025, up from 0.6% in the previous month, indicating rising costs for manufacturers and traders. Compared to a 2.3% increase in July 2024, this is still a softer trend, but businesses may face pressure to pass costs to consumers if wholesale inflation continues to build.
