Inflation in Pakistan 2025: Single Digits Return — Then the Energy Shock
2025 was supposed to be the year Pakistan put inflation behind it. For most of the year it did — single-digit CPI, rate cuts, breathing room. Then February 2026’s geopolitics undid the calm. This is the story of 2025 and the turn into 2026.
Quick answer: Pakistan’s inflation stayed in single digits through 2025 as the 2024 disinflation held — the SBP cut rates from the 22% peak. But the US–Iran war of February 2026 and the Strait of Hormuz closure sent fuel soaring, pushing inflation back into double digits by spring 2026.
In this guide
The 2025 calm
Through 2025, the disinflation of late 2024 held: CPI printed in single digits month after month, food prices stabilised on decent harvests, and energy stayed manageable. Households finally saw wages catch up a little. PBS’s quarterly averages for FY2025-26’s early quarters were a fraction of the 29% FY23 nightmare — the Q1 FY27 average of 10.2% (vs 4.3% a year earlier) shows how sharply the turn came.
Rate cuts
With inflation tamed, the SBP pivoted: the policy rate came down in steps from the 22% peak through 2024–25, easing borrowing costs for businesses and the government’s debt servicing. By late 2025 the debate had shifted to how fast to normalise — see our policy rate guide.
The February 2026 shock
On 28 February 2026, Israel and the US attacked Iran; Tehran shut the Strait of Hormuz — the route for around a fifth of global energy supplies. Pakistan, which imports most of its oil, was hit directly: petrol peaked at Rs 458.41/litre on 3 April 2026, diesel at Rs 520.35. The government moved from fortnightly to weekly and then daily fuel pricing (from 17 July 2026). Inflation re-entered double digits — 10.3% by September 2026 — and the calm of 2025 became a memory. Full fuel story in petrol & inflation.
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2025: FAQs
What was Pakistan’s inflation rate in 2025?
Single digits through most of 2025 — the calm after the 2024 disinflation.
Why did inflation rise again in 2026?
The US–Iran war of February 2026 shut the Strait of Hormuz, sending fuel prices — and then everything — soaring.
What was the highest petrol price in Pakistan?
Rs 458.41 per litre on 3 April 2026; diesel peaked at Rs 520.35 the same day.
When did Pakistan switch to daily fuel pricing?
17 July 2026, announced by Petroleum Minister Ali Pervaiz Malik.
