Pakistan inflation eases to 5.6% in December, in line with govt forecast

PBS data show month-on-month decline as 6MFY26 inflation falls to 5.15%

Business Recorder

01 Jan, 2026

Business & Economy

A man selling vegetables waits for customers at his makeshift stall at the Empress Market in Karachi. Reuters file

Pakistan’s headline inflation clocked in at 5.6% on a year-on-year (YoY) basis in December 2025, showed Pakistan Bureau of Statistics (PBS) data on Thursday, a reading in line with the Ministry of Finance estimate of 5.5-6.5%.

The consumer price index (CPI) was recorded at 6.1% in November 2025. The CPI stood at 4.1% in December 2024.

On a month-on-month basis, it decreased by 0.4% in December 2025, as compared to an increase of 0.4% in the previous month and an increase of 0.1% in December 2024.

This takes the 6MFY26 inflation reading at 5.15% against 7.22% in 6MFY25.

CPI inflation (Urban) increased by 5.8% on a year-on-year basis in December 2025, as compared to an increase of 6.1% in the previous month and 4.4% in December 2024.

On a month-on-month basis, it decreased by 0.4% in December 2025 as compared to an increase of 0.5% in the previous month and a decrease of 0.1% in December 2024.

CPI inflation (Rural) increased by 5.4% on a year-on-year basis in December 2025, as compared to an increase of 6.3% in the previous month and 3.6% in December 2024.

On a month-on-month basis, it decreased by 0.6% in December 2025, as compared to an increase of 0.2% in the previous month and an increase of 0.3% in December 2024.

In its monthly outlook released on Wednesday, the Ministry of Finance has projected that inflation readings will remain in the range of 5.5% to 6.5% in December 2025.

“Inflation is projected to remain moderate, in the range of 5.5-6.5% in December, primarily reflecting base effect,” it said.

However, the reading is lower than the expectations of several brokerage houses.

Topline Securities expected Pakistan’s CPI for December 2025 to clock in at 5.75-6.25% YoY compared to 6.15% in November 2025 and 4.07% in December 2024.

“On a MoM basis, inflation for December 2025 is projected at -0.18%”.

Meanwhile, JS Global expected CPI to clock in close to 6.0% for December 2025.

“For 1HFY26, average inflation is likely to clock in at ~5.2%, compared to 7.3% during the same period last year,” it said.

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