FX.co ★ Pakistan Inflation Rate Slows to 4-Month Low

Pakistan experienced a decline in its annual inflation rate, reaching 5.6% in December 2025, down from 6.1% in November. This marks the lowest inflation rate since August. The deceleration was primarily attributed to reduced pressures on food prices, with inflation for food and non-alcoholic beverages slowing to 3.2%, compared to 5.5% in November. A significant factor was the sharper decrease in perishable food prices, which plummeted by 17.8%, compared to a 3.7% decline previously, effectively counterbalancing a slight rise in inflation for non-perishable food items, which increased to 7.5% from 7.3%. Additionally, price growth eased in categories such as clothing and footwear (6.2% down from 6.5%), furnishings and household maintenance (3.4% down from 3.5%), and healthcare (7.7% down from 8.3%). Meanwhile, costs decreased for restaurants and hotels, falling to 5.6% from 5.3%, and prices continued their decline in recreation and culture, from -4.1% to -4.3%. Conversely, inflation saw an uptick in the housing and utilities sector, escalating to 6.9% from 5.3%. On a month-to-month basis, consumer prices dropped by 0.45% following a 0.4% increase in November. On an annual scale, inflation eased in both urban areas (dropping to 5.8% from 6.1%) and rural regions (falling to 5.4% from 6.3%).