After inching up to 3.5% YoY in May, Pakistan’s headline inflation is expected to lower slightly, clocking in at 3.1% in June, as per a report by brokerage house JS Global.
Pakistan’s headline inflation hit 3.5% on a year-on-year basis in May 2025, a reading higher than that of April 2025, when it stood at 0.3%, showed Pakistan Bureau of Statistics (PBS) data.
“Following a 3.5% YoY reading in May 2025, the CPI is expected to be at 3.1% YoY in June 2025. The base effect is now fading, signalling a return to normalised price trends,” said JS Global.
This would take the FY25 average to 4.6%, down from the FY24 average of 23.9%, it added.
It may be noted that the inflation reading in Pakistan rose to a record 38% on a year-on-year basis in May 2023, the highest level since data was made available beginning in July 1965.
As per JS Global, food inflation for June is predicted to rise 2.8% on a YoY basis, which was 0.97% last year, owing to the dissipation of the base effect.
“Nevertheless, price decreases in certain food items are likely to lead to a MoM decline in food inflation. Housing, Gas and Electricity is projected to post a 4% YoY decline in Jun-2025, primarily due to a reduction in electricity tariffs,” it projected.
Meanwhile, core inflation is expected to clock in around 8.5% YoY in June.
It added that the State Bank of Pakistan (SBP) maintained the policy rate at 11% in the Monetary Policy Committee (MPC) meeting held earlier this week.
It noted that from June 2024 till June 2025, the policy rate has been cut by a total of 1,100bp, declining from a peak of 22% to 11%.
“Potential disruptions in global supply chains, and an uncertain outlook for global commodity prices were the key risks highlighted by MPC,” JS Global said.
SBP is likely to meet in July 2025 for its next MPC meeting.
