Pakistan’s consumer price index (CPI) inflation for May 2025 is projected to slow significantly to around 3.0% year-on-year, according to local brokerage Arif Habib Limited (AHL). This marks a notable drop compared to previous months, based on Sensitive Price Index data collected over the first two weeks of May.
On a month-on-month basis, inflation is expected to decline by 0.61%, driven mainly by falling prices in key sectors: food prices are forecast to drop 1.9%, transportation costs by 0.8%, and housing-related expenses by 0.7%.
This would represent one of the lowest monthly inflation rates Pakistan has seen in recent years. AHL’s estimates place the May year-on-year inflation at about 3.01%, though a sensitivity analysis suggests it could vary between 2.1% and 5.2%, depending on price movements for the remainder of the month.
The easing inflation trend could influence the central bank’s upcoming monetary policy decisions, potentially paving the way for rate easing as inflationary pressures moderate.