By Staff Reporter
ISLAMABAD: Pakistan’s consumer prices inflation rose 5.6% in December from a year earlier, easing from November’s pace and landing within the government’s projected range as food costs dropped.
The reading compared with a 6.1% increase in November and 4.1% a year ago, according to data released on Thursday by the Pakistan Bureau of Statistics. Month-on-month, prices fell 0.4%, versus a 0.4% gain the prior month. The slowdown brings average inflation for the first half of the fiscal year that ends in June to 5.15%, down from 7.22% in the same period a year earlier.
Urban inflation rose 5.8% on the year, easing from November’s 6.1% pace, while rural prices climbed 5.4%, down from 6.3% the previous month. On a monthly basis, urban prices dropped 0.4% and rural prices slid 0.6%. The data matched the finance ministry’s forecast. “Inflation is projected to remain moderate, in the range of 5.5-6.5% in December, primarily reflecting base effect,” the ministry said in its monthly outlook released Wednesday.
Still, the figure came in a bit softer than some private estimates. Topline Securities had anticipated a range of 5.75% to 6.25% for December, while JS Global pegged it close to 6%. “For 1HFY26, average inflation is likely to clock in at ~5.2%, compared to 7.3% during the same period last year,” JS Global said.
Lower prices for perishable food items drove the monthly decline, with overall food costs dropping 1.7% from November in both urban and rural areas, the statistics bureau said. The figures arrive after the State Bank of Pakistan surprised markets last month by trimming its key policy rate by 50 basis points to 10.5%, ending a four-meeting pause. All analysts in a poll had expected no change.
Inflation has cooled sharply from peaks above 30% in 2023, staying within the central bank’s 5% to 7% target range through the July-to-November period. But the SBP has flagged persistent core inflation and warned that headline figures could tick up temporarily toward fiscal year-end due to base effects.
Non-food inflation stayed elevated in December across urban and rural areas, highlighting the central bank’s concerns over sticky underlying pressures. The bank said its inflation outlook remains broadly unchanged. Separately, the International Monetary Fund has urged caution against premature monetary easing as part of Pakistan’s $7 billion loan program.
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