ISLAMABAD: Pakistan’s headline inflation eased to 5.6 percent on a year-on-year basis in December 2025, according to fresh data released by the Pakistan Bureau of Statistics (PBS) on Thursday. The reading came in line with projections made by the Ministry of Finance, which had earlier estimated inflation to remain within the range of 5.5 to 6.5 percent for the month.
The latest figure marks a decline from November 2025, when consumer price index (CPI) inflation stood at 6.1 percent. It also shows a notable increase compared to December 2024, when inflation was recorded at 4.1 percent, reflecting changes in base effects and price trends over the past year.
On a month-on-month basis, inflation declined by 0.4 percent in December 2025. This contrasts with a 0.4 percent increase recorded in November 2025 and a 0.1 percent increase seen in December 2024. The monthly decline suggests some easing in price pressures, particularly in food and essential commodities.
With this latest data, average inflation for the first six months of fiscal year 2026 (6MFY26) now stands at 5.15 percent, significantly lower than 7.22 percent recorded during the same period of the previous fiscal year. This improvement indicates relatively better price stability compared to last year.
Urban inflation, as measured by CPI (Urban), rose by 5.8 percent year-on-year in December 2025. This compares with a 6.1 percent increase in November 2025 and 4.4 percent in December 2024. On a month-on-month basis, urban inflation fell by 0.4 percent, reversing a 0.5 percent increase in the previous month.
Meanwhile, CPI inflation in rural areas increased by 5.4 percent on a year-on-year basis, down from 6.3 percent in November 2025, but higher than the 3.6 percent recorded in December 2024. On a monthly basis, rural inflation declined by 0.6 percent, compared to a 0.2 percent increase in November.
In its monthly economic outlook released a day earlier, the Ministry of Finance said inflation was expected to remain moderate due to favorable base effects. It noted that overall price stability was improving, though global commodity prices and domestic supply conditions would continue to influence future trends.
The December inflation figure was slightly lower than expectations from several brokerage firms. Topline Securities had projected CPI inflation to fall within the range of 5.75 to 6.25 percent year-on-year, while JS Global expected inflation to hover close to 6.0 percent. JS Global also projected average inflation for the first half of FY26 at around 5.2 percent, compared to 7.3 percent in the same period last year.
The lower-than-expected inflation reading may provide some relief to households and could influence future monetary policy decisions as authorities balance growth and price stability.
