Islamabad, 2 June, 2025: Yearly Inflation Rate in Pakistan saw a modest rise in May 2025, with new data from the Pakistan Bureau of Statistics (PBS) indicating a 3.5% increase compared to the same month last year.
This marks a noticeable shift from April’s minimal 0.3% annual rise and reflects a gradual normalization following last year’s elevated levels.
Month-on-month, however, prices eased slightly by 0.2% in May, extending a trend from April’s 0.8% drop and signaling continued disinflationary pressures in key sectors.
Over the eleven-month span of the current fiscal year (11MFY25), the Yearly Inflation Rate has averaged 4.61% a sharp decline from the 24.52% posted during the same period a year earlier. Economists attribute this cooling to tighter monetary policy and improved food supply conditions.
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In urban centers, consumer prices rose 3.5% annually in May, compared to 0.5% in April and 14.3% in May 2024. On a monthly basis, the increase was marginal at 0.1%. In contrast, rural inflation reached 3.4% year-on-year, bouncing back from a 0.1% contraction in April. However, rural prices dipped 0.5% on a monthly basis, following a 1.0% decline the previous month.
The Sensitive Price Index (SPI), which tracks essential commodities, dropped 0.6% in May on an annual basis down from a 3.6% decrease in April and a stark 15.3% fall in May 2024. Monthly SPI data also reflected a 1.0% contraction.
Core inflation, excluding volatile food and energy components, remained subdued. Urban NFNE inflation eased to 7.3% annually in May from 7.4% in April. Rural core inflation dipped to 8.8%, slightly below April’s 9.0% figure.
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The trimmed mean core inflation, which excludes the most extreme price movements, edged higher. Urban areas recorded a 4.9% increase year-on-year, up from 3.8% the previous month. Rural trimmed inflation followed suit, climbing to 4.7% from April’s 3.3%.
While analysts view the current data as encouraging, they caution that the Yearly Inflation Rate may face pressure in coming months due to global commodity volatility and domestic fiscal adjustments.
For now, Pakistan’s economic managers can find cautious optimism in the downward momentum a rare reprieve after a turbulent inflationary cycle over the past two years.
