ISLAMABAD: Headline consumer inflation eased to 3 per cent in August slightly fell from 4.1pc a month earlier, driven by a slight decrease in food and energy prices, official data released by the Pakistan Bureau of Statistics (PBS) showed on Monday.

The slight reverse in the inflation rate from the previous uptick over the past two months is attributed to decline in petrol and diesel prices, and electricity charges. On a month-on-month basis, inflation declined by 0.6pc compared to the previous week.

The inflation between July and August was recorded at 3.53pc this year, the lowest compared to 10.36pc over the corresponding months of last year.

Despite the month-on-month increase, average annual inflation for FY25 dropped sharply to 4.49pc from 23.41pc in the previous year, aided by a high base effect, declining food prices, and lower transport costs.

Economists describe the current trend as disinflation — a slowdown in the pace of rising prices, not a general decrease as seen in deflation — though the cost of living remains high for many households.

Inflation in August fell to its lowest in over a year, but non-food and core inflation remains elevated

Inflation had previously fallen into single digits in August 2024 — at 9.6pc — for the first time in over three years, continuing a declining trend until the recent rebound. The government has projected an inflation target of 7pc for the current fiscal year.

Food inflation in August decreased by 0.5pc in urban areas and 0.5pc in rural areas, while non-food inflation reached 5.9pc in urban areas and 5.2pc in rural regions. This marks that non-food inflation is still very high.

In August, core inflation — excluding volatile food and energy components — stood at 6.9pc in urban areas and 7.8pc in rural areas.

Urban food items that saw notable month-on-month price increases included tomatoes (19.63pc), onions (14.38pc), eggs (12.84pc), chicken (4.16pc), butter (3.21pc), fish (1.46pc), gur (0.79pc), rice (0.73pc), condiments and spices (0.64pc), meat (0.41pc), milk powder (0.34pc) and readymade food (0.26pc).

Conversely, declines were noted in fresh fruits (21.16pc), fresh vegetables (18.48pc), potatoes (8.77pc), sugar (5.49pc), pulse moong (2.81pc), gram whole (2.16pc), pulse gram (2.09pc), pulse mash (1.40pc), wheat products (1.31pc), wh­­eat flour (1.24pc), pulse masoor (0.82pc) and besan (0.49pc).

Non-food categories also witnessed significant price hikes, including newspapers (11.93pc), hospitals services (1.71pc), education (1.61pc), cleaning & laundering (1.41pc) and doctor (MBBS) clinic fee (1.21pc). Decline was also seen in Liquified Hydrocarbons (7.30pc), electricity charges (6.87pc), motor fuel (1.51pc) and transport services (0.71pc).

Published in Dawn, September 2nd, 2025