Pakistan’s Inflation Drops to 3% in August 2025

Pakistan’s inflation showed signs of easing in August 2025, providing relief to consumers amid rising cost-of-living concerns. According to the Pakistan Bureau of Statistics (PBS), the country’s headline inflation declined to 3% year-on-year (YoY), down from 4.1% in July 2025. This reduction comes mainly due to falling prices of perishable food items and lower electricity costs.

On a month-on-month (MoM) basis, inflation decreased by 0.65%. Urban areas experienced a sharper drop of 0.73%, while rural inflation fell by 0.52%. The decline in perishable food prices, including fresh fruits, vegetables, and potatoes, was the key factor, whereas staples like rice, meat, and milk saw slight increases.

Key Monthly Changes (August 2025)

Yearly, urban inflation rose by 3.38%, while rural inflation increased by 2.43%, keeping the overall CPI moderate. For the first two months of FY2025-26 (July-August), the average inflation rate stood at 3.53%, with urban areas at 3.90% and rural areas at 2.98%.

The easing of inflation is expected to provide temporary relief to households, especially for essential food and energy items, while policymakers continue monitoring non-food cost increases.