KARACHI – Pakistan’s inflation plunged to 3% in August 2025, shocking markets and outpacing even government projections.
The figure released by the Pakistan Bureau of Statistics (PBS) marks lowest reading in recent memory and offers long-awaited relief to consumers battered by years of soaring prices.
On month-to-month basis, prices actually fell by 0.6%, a rare development in a country where everyday costs have often spiraled upward. In stark contrast, inflation had touched an unbearable 38% in May 2023, the highest level in Pakistan’s history.
The drop has surprised everyone from policymakers to analysts, and even masses, who read these numbers in news. Finance Ministry had forecast inflation to stay between 4–5% in August, while brokerage houses like Insight Securities expected it to hover around 4.1%. Instead, the actual number came in dramatically lower, signaling that cooling energy prices and a dip in LPG rates outweighed the pressure from food costs.
In Cities, Urban inflation slowed to 3.4%, compared with 11.7% in the same month last year, while prices slid 0.7% month-on-month.
For Villages, rural areas also felt the relief, with inflation down to 2.4%, compared to 6.7% last year, as costs fell 0.5% from July.
For Pakistanis, this sudden easing could mean breathing space after years of skyrocketing grocery, fuel, and utility bills. Economists now warn, however, that the challenge will be whether the country can hold onto this unexpected stability.
