ISLAMABAD – Pakistan’s headline inflation jumped to 3.5% year-on-year in May 2025, according to fresh data from the Pakistan Bureau of Statistics (PBS). This increase was higher than the government’s projection of 1.5% to 2% for the month.
Although inflation slightly eased by 0.2% on a month-on-month basis, this decline follows a 0.8% drop in April, and yearly inflation pressures remain firm, especially due to rising food and tax-related costs. Analysts had warned that inflation could spike closer to 4% by June, which now seems likely.
In urban areas, food items saw significant jumps. The price of chicken rose by 52%, moong pulse by 31%, and fresh fruits by 29.5%. Non-food items also added pressure, with a massive 169% rise in motor vehicle tax, along with increases in electrical appliances, water bills, and clothing.
In rural regions, inflation was similarly driven by food prices, including chicken (46%), milk powder (25%), and sugar (21%). Non-food costs, such as dental services, personal effects, and medical treatments, also went up. Month-on-month, rural inflation was influenced by spikes in eggs, condiments, and clinic fees.
So far, average inflation for the first 11 months of FY25 stands at 4.61%, a major improvement compared to 24.52% during the same period last year, due to base effects and better supply management. However, experts caution that volatile food prices, global oil trends, and tax adjustments in the upcoming budget could keep inflation risks high in the short term.