Inflation in Pakistan is projected to settle between 3.75% and 4.25% in August 2025, according to a report by Topline Securities, a private economic think tank.

The monthly increase is expected to be modest at 0.3%, reflecting signs of stability compared to last year’s double-digit price hikes.

Inflation trends compared to last year

The report highlights that inflation stood at 4.07% in July 2025, while in August last year it was 9.63%. Looking ahead, Topline Securities expects the annual inflation rate to range between 6% and 7% by the end of the current financial year, broadly aligning with the State Bank of Pakistan’s forecast of 5% to 7%.

Also Read: Weekly inflation rises by 0.31%

Scope for interest rate cuts

With price pressures easing, the think tank noted that the central bank has room to cut the policy rate by 50 to 100 basis points in the coming months. It further projected that the interest rate could decline to 10% by December 2025, potentially lowering borrowing costs for businesses and households.

What will get costlier or cheaper

Topline Securities also forecast changes in essential commodity prices. The report warned that transport, diesel, tomatoes, onions, and eggs are likely to become more expensive this month. On the other hand, relief may come for consumers as fresh fruits, sugar, and chicken are expected to see price declines.

On Aug 15, the Pakistan Bureau of Statistics (PBS) reported that inflation in essential commodities had recorded an increase for the second consecutive week, with the weekly inflation rate rising by 0.31% and the annual inflation rate reaching 2.21%.

Also Read: Private sector vital for Pakistan’s economy: FinMin Aurangzeb

A total of 17 essential items witnessed a price increase during that week. Among the most notable were tomatoes, which rose by Rs10.42 per kilogram, and live broiler chicken, which increased by Rs19.67 per kilogram. The price of a dozen eggs had increased by Rs6.19, while a 20-kilogram flour bag became costlier by over Rs21.

Other items that recorded a rise in prices include onions, garlic, black gram and jaggery. In contrast, prices of bananas, potatoes, rice and LPG cylinders saw a decline. Prices of 24 items remained stable, while nine items became cheaper.