August 2025 sees Pakistan's inflation rate reach 3%
In a positive development for Pakistan's economy, the headline inflation for August 2025 has shown a decrease compared to the previous month. According to the Pakistan Bureau of Statistics (PBS), the headline inflation stood at 3% on a year-on-year (YoY) basis in August 2025. This is a significant decrease from the 4.1% projected by Insight Securities and the 4-5% range expected by the Finance Ministry.
The Consumer Price Index (CPI) inflation average during the July-August FY25 stood at 3.53%. This is lower than the CPI inflation average during the same period in FY24, which was 10.36%.
The latest CPI reading also came in lower than the projections made by several brokerage houses. On a month-on-month basis, CPI inflation urban decreased by 0.7%, while CPI inflation rural decreased by 0.5%. Specifically, CPI inflation urban was 3.4% on a year-on-year basis, and CPI inflation rural was 2.4% on a year-on-year basis.
The decrease in headline inflation can be attributed to several factors. Lower electricity charges are expected to negate some of the impact of food price increases on headline inflation. However, the prices of food items are projected to increase, contributing to the headline inflation.
One factor that may have contributed to the decrease in headline inflation is the expected decline in the LPG price, which may further reduce headline inflation.
It is worth noting that inflation has been a significant and persistent economic challenge in Pakistan, particularly in recent years. In May 2023, the CPI inflation rate hit a record high of 38%.
Despite the positive news about the decrease in inflation, there are no search results indicating that any institution made a forecast for Pakistan's Consumer Price Index (CPI) inflation in August 2025 or how that forecast compared to the actual development.
In conclusion, Pakistan's economy has shown a positive trend with the decrease in headline inflation for August 2025. However, the challenge of inflation remains, and it will be important to monitor the impact of food price increases and other factors on future inflation rates.
