Pakistan CPI inflation slows to 5.6% y/y in December
People walk outside shopping mall in Karachi, Pakistan September 23, 2025. REUTERS/Akhtar Soomro
KARACHI, Jan 1 : Pakistan’s consumer price inflation slowed to 5.6 per cent year-on-year in December, while prices fell on a monthly basis, official data showed on Thursday.
The data comes after Pakistan’s central bank cut its key policy rate by 50 basis points to 10.5 per cent last month, breaking a four-meeting hold, in a move that surprised markets. All analysts polled by Reuters had expected rates to remain unchanged at the December meeting.
Inflation eased from 6.1 per cent in November and marked a sharp slowdown from levels that peaked above 30 per cent in 2023, according to official data.
Lower prices of perishable food items helped drive the monthly decline, the Pakistan Bureau of Statistics said, with food prices falling 1.7 per cent month-on-month in December, led by declines in both urban and rural areas.
The finance ministry had said on Wednesday that inflation was expected to remain moderate at 5.5 per cent–6.5 per cent in December.
The State Bank of Pakistan has said inflation stayed within its 5 per cent–7 per cent target range during the July–November period but warned that core inflation remains sticky and headline inflation could rise temporarily towards the end of this fiscal year, which ends in June, due to base effects.
Non-food inflation remained elevated in both urban and rural areas in December, underscoring the central bank’s concerns over persistent underlying price pressures.
The central bank has said the inflation outlook remains broadly unchanged, while the International Monetary Fund has cautioned against premature monetary easing under Pakistan’s $7 billion loan programme.
