ISLAMABAD – Pakistan’s year-on-year Consumer Price Index (CPI) inflation rose by 3.2% in June, according to the Pakistan Bureau of Statistics — closely matching the Finance Ministry’s earlier forecast of 3% to 4%.
On a monthly basis, prices edged up 0.2%, reversing the same amount of decline seen in May.
Topline Securities noted that the full-year inflation for FY25 stands at 4.49%, well within its projected range. The firm attributed the drop from FY24’s average inflation of 23.41% mainly to a 3.28% deflation in housing, utilities, and fuels — largely due to a 30% drop in electricity prices compared to last June.
For FY26, Topline forecasts average inflation to remain between 6% and 7%. Real interest rates stood at 6.5% in June 2025, and are expected to stay between 4% and 5% in FY26 — notably higher than Pakistan’s historical average of 2% to 3%.
However, the brokerage cautioned that any sharp fluctuations in global commodity prices could impact future inflation projections.
This data follows the State Bank of Pakistan’s decision last month to maintain the benchmark interest rate at 11%. The central bank expects short-term inflation volatility but projects a return to its 5% to 7% target range in the coming months.
The release also comes shortly after Pakistan unveiled its FY26 federal budget, featuring new taxes and subsidy reductions aimed at securing a long-term deal with the International Monetary Fund (IMF).
Analysts have warned that rising energy and tax costs may push inflation higher later this year.
Meanwhile, the Pakistan Stock Exchange rallied 2.3% on Tuesday — the first trading day of the new fiscal year — closing at a record high of 128,475.7 points.
