Pakistan CPI Inflation Slows to 5.6% in December 2025 | Economic Update

Pakistan CPI Inflation Slows to 5.6% in December 2025

Islamabad | January 1, 2026 — Pakistan’s consumer price index (CPI) inflation slowed further in December 2025, reaching 5.6% year-on-year, down from 6.1% in November 2025. By comparison, the CPI in December 2024 was 4.1%. Economists say this decline reflects improving economic conditions and offers some relief to consumers facing daily living costs.

Analysts attribute the slowdown primarily to stabilizing food prices and a reduction in the cost of essential items. In December, vegetable and pulse prices fell by approximately 3–4%, contributing significantly to the lower overall inflation. Both urban and rural consumers reportedly felt the impact of this easing in prices.

On a month-on-month basis, inflation decreased by 0.4% in December, signaling a moderation compared to November. Experts noted that improvements in the supply chain, reduced import pressures, and government oversight helped stabilize prices. Additionally, a 2% decline in global oil prices supported local market stability.

Government sources indicated that the December inflation figures fell within the forecasted range of 5.5–6.5%, boosting confidence in fiscal policies. The average CPI for the first six months of FY2025-26 was 5.15%, compared to 7.22% during the same period last year, suggesting gradual economic stabilization.

However, economists caution that inflationary pressure persists in non-food sectors, particularly in housing, energy, and services, which continue to impact household budgets. The State Bank of Pakistan (SBP) maintained its policy rate at 12% to manage inflationary risks effectively.

Public response to the declining inflation rate has been largely positive, with consumers noticing relief in daily expenses. Yet experts warn that global economic conditions, energy prices, and currency fluctuations could influence future price trends. Overall, the December 2025 CPI figures signal cautious optimism for economic stability in Pakistan, offering partial relief to consumers navigating rising costs.