Pakistan’s headline inflation continued its downward trend in June 2025, clocking in at 3.2% year-on-year, according to the latest figures released by the Pakistan Bureau of Statistics (PBS) on Tuesday.

This marks a slight decline from May 2025, when the rate stood at 3.5%, reinforcing signs of economic stability amid government efforts to curb price pressures.

On a month-on-month basis, however, inflation edged up by 0.2% in June, reversing the 0.2% decline recorded in May. For comparison, month-on-month inflation was 0.5% in June 2024.

Overall, average inflation for the fiscal year 2024-25 settled at 4.49%, a sharp drop from the staggering 23.41% recorded in FY24. This significant improvement underscores the country’s gradual recovery from the inflationary crisis that peaked in May 2023 when headline CPI hit a record 38%.

Analysts say the latest reading is well in line with expectations. The Finance Ministry had projected inflation to ease within the 3–4% range in June, citing stable commodity prices and improved supplies. “On the external front, higher remittances and exports will continue to keep the current account in surplus for FY 2025,” stated the ministry’s monthly economic outlook.

The Economic Survey 2024-25 also noted that inflation is likely to remain between 4.5% and 5% during the current fiscal year, supported by a steep drop in perishable food prices and adequate reserves of essential non-perishable items.

Brokerage houses echoed similar projections. JS Global had forecast a decline to 3.1%, noting that the impact of the previous year’s high base was now fading. “The base effect is now fading, signalling a return to normalised price trends,” said its report. Insight Securities, meanwhile, accurately projected June inflation at 3.2%.

Urban and rural inflation figures also highlighted nuanced trends. In urban areas, year-on-year inflation eased to 3%, down from 3.5% in May and a notable decline from 14.9% in June last year. Month-on-month urban inflation remained stable at 0.1%.

Rural inflation, on the other hand, slightly rose to 3.6% year-on-year in June 2025, compared to 3.4% the month prior. On a monthly basis, it increased by 0.5%, reversing a 0.5% drop in May.

With signs of economic stability now becoming more visible, experts believe the government’s inflation control measures and external economic support are beginning to bear fruit. While challenges remain, Pakistan’s improving macroeconomic indicators signal cautious optimism for the months ahead.