Pakistan Inflation Rises to 6.2% in October as Core Prices and Food Costs Surge

November 04, 2025

Pakistan’s headline inflation climbed to 6.2% year-on-year in October 2025, marking the second consecutive monthly increase, driven by rising prices in both food and non-energy segments. According to the Pakistan Bureau of Statistics (PBS), the uptick reflects a buildup of underlying inflationary pressures, particularly in core inflation, as supply-side disruptions and seasonal shocks continue to affect the market.

The government attributed the price surge to flood-related supply issues and the closure of the Pak-Afghan border, which has disrupted the inflow of perishable goods. Urban inflation stood at 6%, while rural areas recorded a higher 6.6%, underscoring the widespread impact on consumers across regions.

Core Inflation Strengthens

Core inflation—excluding food and energy prices—rose sharply, indicating sustained upward pressure. In urban centers, it increased to 7.5% (from 7% a month earlier), while in rural areas it climbed to 8.4%, compared to 7.8% previously. This persistent rise suggests that inflationary momentum may continue in the near term.

The World Bank recently revised its inflation outlook for Pakistan, projecting 7.2% for FY2025–26, slightly above the government’s target. The State Bank of Pakistan (SBP), which has maintained the policy rate at 11%, anticipates inflation to ease gradually in the second half of the fiscal year as supply conditions normalize.

Food and Energy Trends

Food inflation accelerated in October, rising 4.5% in urban and 6.8% in rural areas. Non-perishable food items—comprising around 30% of the inflation basket—saw prices rise by 6.2% year-on-year, while perishable items edged up 1.7%.

Disruptions from the Afghan border closure led to a 127% surge in tomato prices and a 35% increase in sugar prices, while wheat prices rose by 25% and flour prices by 16%. On the other hand, onion prices fell by one-third and chicken prices dropped by 29%, offering partial relief to consumers.

In the energy segment, gas tariffs saw a steep 23% annual increase, driven by administrative adjustments, while electricity costs declined 16% compared to last year due to renegotiated energy contracts and reduced system losses, according to Power Minister Sardar Awais Leghari.

Fiscal and Policy Outlook

At a recent press briefing, Finance Minister Muhammad Aurangzeb noted that interest rates were moving in the right direction but expressed hope for further cuts to support economic activity. Business leaders have also urged for lower borrowing costs, citing that real rates remain significantly above inflation.

Despite allocating Rs8.2 trillion for debt servicing in the FY2025–26 budget, Finance Secretary Imdad Ullah Bosal stated that actual expenditures are likely to remain below this level due to improved debt management.

With inflation rising and economic growth likely to undershoot the 4.2% target, maintaining price stability while encouraging investment remains a delicate balancing act for policymakers.