Pakistan’s headline inflation dropped sharply to 3% year-on-year (YoY) in August 2025, down from 4.1% in July, according to Pakistan Bureau of Statistics (PBS) data released on Monday. On a month-on-month basis, inflation decreased by 0.6%, compared to a 2.9% surge in July.
The Consumer Price Index (CPI) average for July-August FY25 stood at 3.53%, a steep decline from 10.36% in the same period last year. The reading is notably below the Finance Ministry’s projected range of 4–5% and lower than brokerage house estimates, including Insight Securities, which had forecast inflation at 4.1% for August.
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PBS data showed urban inflation rose by 3.4% YoY in August, compared to 4.4% in July, while rural inflation increased by 2.4% YoY against 3.5% last month. Both urban and rural inflation also recorded declines on a monthly basis.
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Inflation has been on a downward trajectory since peaking at a record 38% in May 2023, providing some relief to households and policymakers. Analysts caution, however, that food supply disruptions and energy price shifts could challenge stability.
