Inflation Eases in Pakistan: July 2025 Outlook Remains Stable
The Finance Division of Pakistan, in its Monthly Economic Update & Outlook for July 2025, has projected inflation to remain within a manageable range of 3.5% to 4.5% for the month. This reflects a continued trend of economic stabilization.
However, the report also cautions against potential risks stemming from recent heavy rainfall, which may impact agricultural output and disrupt supply chains, possibly influencing future price trends.
📉 Significant Drop in Inflation Rate
For fiscal year 2024-25, the average Consumer Price Index (CPI) inflation stood at 4.5%, marking a dramatic improvement compared to 23.4% in the same period last year.
In June 2025, CPI inflation was recorded at 3.2% year-on-year, a sharp decline from 12.6% in June 2024. On a month-on-month basis, prices rose slightly by 0.2%, following a similar 0.2% decline in May 2025.
🥬 Food and Utilities See Decline
One of the key contributors to this positive trend has been the sharp drop in perishable food prices, which declined by 10.6% YoY, providing relief to consumers. Similarly, the Housing, Water, Electricity, Gas & Fuels category saw a 3.3% decrease, further easing household expenses.
📈 Moderate Increases in Some Sectors
Despite overall improvement, some categories did show upward price trends:
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Health: +12.2%
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Education: +10.1%
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Clothing & Footwear: +8.9%
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Restaurants & Hotels: +8.4%
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Tobacco & Beverages: +5.1%
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Non-perishable food: +4.8%
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Household equipment: +3.7%
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Transport: +0.6%
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Communication: +0.5%
🛒 Weekly Prices Update
According to the Sensitive Price Indicator (SPI) for the week ending July 17, 2025, there was a 0.38% increase. Out of 51 essential items, prices rose for 22, dropped for 9, while 20 remained unchanged.
✅ Conclusion
The latest data shows a remarkable slowdown in inflation, offering much-needed relief to households across Pakistan. With continued vigilance and responsive policies, price stability may be maintained, though weather-related risks remain a concern.
