Inflation intensifies 4.07% WoW
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Inflationary pressures intensified as the Sensitive Price Indicator (SPI) for the week ended July 24, 2025 surged 4.07% week-on-week (WoW), according to the latest data released by the Pakistan Bureau of Statistics (PBS).
The rise was driven primarily by steep hikes in gas charges, electricity tariffs and essential food items such as tomatoes and eggs, hitting the lowest income group (Q1) hardest with a 3.98% increase in their cost of living.
The SPI data showed gas charges soared 29.85%, electricity costs rose 21.46% and key food items like tomatoes and eggs got costlier by 22.93% and 3.96%, respectively. Meanwhile, chicken prices dropped 7.95%, sugar 4.25% and onions 3.05%, offering slight relief amid broader inflationary pressures.
Year-on-year (YoY) inflation in the week ended July 24, 2025 stood at 2.22%, with non-food items such as ladies' sandals (55.62%) and gas charges (29.85%) recording the steepest increases. Conversely, onions (-49.13%) and tomatoes (-30.20%) saw significant price declines compared to last year.
The PBS report, which tracks 51 essential items across 17 cities, noted that 14 items became more expensive, 12 got cheaper and 25 remained stable. However, the persistent rise in utility and food costs continues to strain household budgets, especially for the poorest consumers.
Economists attribute the inflation spike to rising global energy prices, domestic gas tariff adjustments and supply chain disruptions affecting perishable goods. The government faces mounting pressure to intervene, particularly for the Q1 income group, which spends a larger share of earnings on essentials like food and fuel.
While recent declines in poultry and sugar prices provide some respite, experts warn that inflation volatility, especially in energy and staple foods, could worsen if supply-side issues persist.
The SPI's findings underscore the uneven impact of inflation, with lower-income families bearing the brunt of rising living costs. Analysts urge targeted subsidies, price controls on essential commodities and long-term agricultural reforms to stabilise food supply chains.
As Pakistan navigates economic challenges, the latest data highlights the urgent need for policies that protect vulnerable populations from inflationary shocks while ensuring price stability in the months ahead.
Meanwhile, the headline monthly inflation, measured by the Consumer Price Index (CPI), is expected to clock in at 3.3% year-on-year for July 2025, according to projections made by Optimus Research.
The anticipated surge in inflation is primarily driven by significant adjustments in administered energy prices. PBS appears to have fully reversed the earlier electricity subsidy adjustments implemented in the first quarter of FY25, which had understated the impact of rising tariffs. As a result, electricity charges are expected to jump 15% month-on-month in July.
Additionally, gas prices are projected to increase 22.7% month-on-month, further contributing to the upward pressure on inflation. These adjustments mark the normalisation of utility pricing in line with fiscal reform commitments, potentially influencing upcoming monetary policy decisions. The State Bank of Pakistan is scheduled to announce the latest monetary policy on July 30.
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