Inflation in Pakistan is projected to settle between 3.75% and 4.25% in August 2025, according to a report released by Topline Securities. The private think tank noted that the monthly rise is expected to be modest at 0.3%, a sign of economic stability compared to last year’s sharp price hikes.
Yearly Comparison of Inflation
The report showed that inflation stood at 4.07% in July 2025, while in August 2024 it was recorded at 9.63%. For the current financial year, Topline Securities expects the annual inflation rate to remain between 6% and 7%. This outlook aligns with the State Bank of Pakistan’s forecast of 5% to 7%.
Possibility of Interest Rate Cuts
With price pressures easing, analysts suggest that the central bank has space to cut the policy rate. Topline Securities forecast a potential reduction of 50 to 100 basis points in the coming months. By December 2025, the interest rate could drop to 10%, reducing borrowing costs for households and businesses.
Impact on Essential Commodities
The report also highlighted changes in commodity prices. Items likely to get more expensive include transport, diesel, tomatoes, onions, and eggs. However, relief may come from falling prices of sugar, fresh fruits, and chicken.
On August 15, the Pakistan Bureau of Statistics (PBS) reported that inflation in essential goods had increased for the second consecutive week. The weekly inflation rate rose by 0.31%, while the annual rate stood at 2.21%.
A total of 17 essential items saw price hikes, with tomatoes rising by Rs10.42 per kilogram, broiler chicken increasing by Rs19.67 per kilogram, and a dozen eggs going up by Rs6.19. A 20-kilogram flour bag became costlier by over Rs21. Prices of onions, garlic, black gram, and jaggery also rose.
In contrast, bananas, potatoes, rice, and LPG cylinders became cheaper. Prices of 24 items remained unchanged, while nine items dropped.
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