Pakistan’s CPI Inflation Projected at 3.7% YoY for August 2025

The National Consumer Price Index (NCPI) is expected to settle at 3.7% YoY in August 2025, while remaining flat at 0.01% MoM, according to market estimates. This keeps the real interest rate at around 7.3%, compared to the State Bank of Pakistan’s (SBP) FY26 inflation outlook of 5–7%.

Core inflation, however, remains sticky at 7.7% YoY, suggesting underlying price rigidity.

Within segments, food prices are expected to dip by 0.3% MoM, driven by declines in fruits (-9.5%), sugar (-4.7%), and chicken (-4.4%), though gains in tomatoes (+26.2%), onions (+15.2%), and eggs (+9.5%) offset some relief.

The housing and utilities index is projected to ease by 0.2% MoM, largely due to a 7.6% drop in LPG prices and downward electricity adjustments (QTA of -1.881/kWh and FCA of -0.7772/kWh). On a YoY basis, however, the segment still shows a 4.9% rise.

Looking ahead, the SBP Monetary Policy Committee (MPC) meets on September 15, 2025. While analysts see room for a 50bps cut, the central bank may prefer to hold rates steady amid concerns over the trade deficit and persistent core inflation. That said, expectations remain for rates to gradually ease toward 10% by year-end 2025.