Abdul Ghani

Inflation in Pakistan remained moderate in July 2025 at 4.1% year-on-year, compared to 3.2% in June and 11.1% a year earlier, according to the Ministry of Finance’s Monthly Economic Update and Outlook for August 2025, exclusively available with Wealth Pakistan.

The main contributors were health (10.8%), education (10.2%), clothing and footwear (8.4%), and restaurants and hotels (7.7%). Housing, water, electricity, gas and fuels rose 3.6%, while non-perishable food prices increased 2.6%. By contrast, prices of perishable food items dropped 8.3%.

On a month-on-month basis, the CPI inflation rose 2.9% in July due to higher energy tariffs. The Sensitive Price Indicator for the week ending August 21, 2025, declined slightly by 0.01%, with prices of 8 items falling, 18 rising, and 25 remaining unchanged. The ministry said inflation is expected to remain in the 4-5% range in August, provided food supplies are not disrupted by climate-related shocks.

While speaking to Wealth Pakistan, Dr Abdul Jalil, Head of the Economics Department at National Defense University, said that the moderation of inflation at 4.1% in July signals economic stability. He said that this trend may reflect effective monetary and fiscal policies, coupled with steady supply and demand factors.

However, while inflation remains under control, it is essential to remain vigilant against potential pressures from external shocks, commodity prices, or wage increases that could disrupt this equilibrium. Maintaining a balance between growth and price stability will be crucial in the months ahead.

Credit: INP-WealthPk