Pakistan's weekly inflation rises slightly; food prices drive increase

Pakistan’s weekly inflation edged up by 0.02% for the week ending June 4, with notable price hikes in essential food items, according to government data released Thursday.

The Sensitive Price Indicator (SPI) showed increases in tomatoes (16.94%), potatoes (11.52%), onions (5.21%), bananas (1.57%), eggs (1.34%), sugar (1.24%), rice (1.02%), pulse masoor (0.65%), fresh milk (0.47%) and petrol (0.41%). Meanwhile, prices dropped for chicken (11.22%), garlic (3.71%), LPG (0.76%) and vegetable ghee (0.24%).

Just before Eid, poultry prices have seen a noticeable decline in several major cities, including Peshawar, Lahore, and Multan.

Year-over-year, the SPI declined by 0.02% compared to the same week in 2024.

The Consumer Price Index (CPI) for May 2025 reached 3.5%, the highest level this calendar year, driven by surges in food and clothing costs. Analysts project CPI to average below 5% year-over-year in fiscal year 2025.

With the central bank’s policy rate at 11%, real interest rates are expected to remain between 7% and 8% in the coming months. Analysts anticipate the Monetary Policy Committee will maintain the current rate in its next meeting on June 16.