Pakistan inflation inches up 3.5% year-on-year in May 2025

Labourers sort mangoes before packing them into boxes at a farm on the outskirts of Hyderabad in Pakistan's southern Sindh province on May 31, 2025. (AFP)
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Updated 03 June 2025
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Pakistan inflation inches up 3.5% year-on-year in May 2025

  • Inflation has cooled significantly, easing from 37.97% in May 2023
  • Federal budget for fiscal year 2025-26 will be released on June 10

KARACHI: Pakistan’s annual inflation rate rose to 3.5% in May, higher than the April 2025 reading of 0.3%, data from the statistics bureau showed on Monday.

On a month-on-month basis, inflation decreased by 0.2% in May 2025, as compared to a decrease of 0.8% in the previous month and a decrease of 3.2% in May 2024. The CPI inflation average during 11MFY25 stood at 4.61%, compared to 24.52% in 11MFY24.

Inflation has cooled significantly, easing from 37.97% in May 2023.

The CPI reading is higher than the government’s expectations. In its monthly economic report released last week, the finance ministry expected inflation to ease to between 1.5% and 2% year-on-year in May, before picking up to 3%-4% in June.

“CPI inflation General, increased to 3.5% on year-on-year basis in May 2025 as compared to 0.3% of the previous month and 11.8% in May 2024,” the Pakistan Bureau of Statistics (PBS) said in its monthly report.

“On month-on-month basis, it decreased by 0.2% in May 2025 as compared to a decrease of 0.8% in the previous month and a decrease of 3.2% in May 2024.”

Food items, whose prices recorded an increase, included Eggs (24.38%), Chicken (8.63%), Condiments and Spices (5.50%), Sugar (4.07%), Gur (3.66%), Milk Powder (2.80%), Potatoes (1.64%), Butter (1.31%), Fresh Fruits (1.21%), Pulse Gram (1.09%), Beverages (0.87%), Meat (0.82%), Sweetmeat (0.79%) and Pulse Moong (0.53%).

Non-food items that witnessed an increase in rates were Cotton Cloth (3.20%), Motor Vehicles (1.86%), Postal Services (1.74%), Major Tools & Equipment (1.23%), Readymade Garments (1.02%), Tailoring (0.95%) and Cleaning & Laundry (0.65%).

The latest CPI reading was also higher than projections made by several brokerage houses.

JS Global projected Pakistan’s headline inflation to inch up to 2.7% in May.

“Pakistan’s CPI is expected to clock in at 2.7% for May. The base effect is now fading, signaling a return to normalized price trends. This is likely to take 11MFY25 average inflation to 4.7%, down from 11MFY24 average of 24.9%,” JS Global had said in a report.

Last month, the State Bank of Pakistan cut the key interest rate by 100 basis points (bps) to 11%, the lowest policy rate since March 2022 (9.75%). The central bank has cut the rate by 1,100 bps since June from an all-time high of 22%.


Public discontent grows in Pakistan’s northwest province ruled by Imran Khan’s party — Gallup

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Public discontent grows in Pakistan’s northwest province ruled by Imran Khan’s party — Gallup

  • Majority in Khyber Pakhtunkhwa say joblessness rising, services lacking, even PTI voters demand corruption probes
  • 83 percent praise health card but only 38 percent back current chief minister’s performance, half say Punjab CM is doing better

ISLAMABAD: A new Gallup Pakistan survey reveals a sharp decline in public satisfaction in the northwestern Khyber Pakhtunkhwa (KP) province where the Pakistan Tehreek-e-Insaf (PTI) party of former Prime Minister Imran Khan has ruled for over a decade, with residents citing poor infrastructure, widespread unemployment and lack of accountability 

The findings, based on face-to-face interviews with 3,000 residents across KP’s seven divisions, offer a rare look at grassroots sentiment in a province that has long been a PTI stronghold. The survey was conducted in February and March 2025, with analysis completed by June.

PTI first came to power in KP in 2013 and has governed the province since. Following the last general elections in 2024, the party formed the provincial government once again, even as its founder, Imran Khan, remains in jail on multiple legal charges he says are politically motivated. 

“Despite 13 years of PTI governance, even its own voters are expressing disappointment,” the Gallup survey report said. “Up to 49 percent of PTI supporters said no recent development had taken place in their area.”

A majority of respondents, 59 percent, reported rising unemployment, while 67 percent said the government had failed to create jobs or business opportunities. Basic services remain uneven: 66 percent said gas was unavailable, and 49 percent reported poor or no electricity access.

Facilities for youth are especially lacking: 77 percent said they lacked access to parks, 81 percent to libraries, and 70 percent to community centers.

Corruption was a recurring theme across sectors. 52 percent of respondents believe development funds were misappropriated, and just 32 percent said they were used properly. Support for accountability was high even among PTI supporters.

“71 percent of respondents, including 62 percent of PTI voters, support formal investigations into alleged corruption in mega projects during PTI’s rule,” Gallup Pakistan said.

A further 48 percent said corruption in government departments has increased, and 40 percent believe it is more prevalent in KP than in Punjab.

HEEALTH CARD YES, GANDAPUR NO

The PTI’s flagship health insurance scheme, the Sehat Card, remains the most popular initiative, with 83 percent of respondents, 88 percent of them PTI voters, saying it has improved health care access.

Yet only 38 percent of respondents said current KP Chief Minister Ali Amin Gandapur is performing better than his predecessors, and 47 percent said they would prefer to see Imran Khan in the role despite his ongoing imprisonment and legal battles.

Half the respondents said Punjab’s chief minister Maryam Nawaz Sharif is performing better than Gandapur.

“The contrast between continued support for PTI’s welfare programs and disillusionment with current leadership signals a shift in political expectations,” the report observed.

The disconnect between government and people on federal ties also comes up in the survey. The PTI-led government has been at odds with the federal administration since at least the 2024 election and even earlier, engaging in protests and public disputes.

Yet the Gallup report shows “85 percent of KP residents favor stronger collaboration between the provincial and federal governments,” suggesting popular support for more cooperative governance.

Another 60 percent of respondents said the KP government had “wasted time in protests and demonstrations rather than focusing on governance.”

The formal justice system is also under increasing public scrutiny. The survey found that 70 percent of respondents feel courts take too long to deliver justice, 50 percent consider the judiciary corrupt, and 53 percent believe court decisions are politically influenced.

In contrast, traditional tribal dispute resolution mechanisms, or Jirgas, are gaining favor. 

“84 percent of those aware of the Jirga system support it, and 70 percent believe Jirga decisions are fair,” Gallup reported.

In conclusion, the Gallup Pakistan survey shows that while PTI still enjoys loyalty from a core voter base, rising economic pressures, lack of development and demand for transparency have eroded its standing among the broader population.

“The survey offers a sobering assessment of public sentiment across KP. Despite strong backing for select welfare programs and the continued popularity of PTI among its base, citizens are increasingly frustrated with lackluster service delivery, limited job opportunities, corruption, and unfulfilled promises,” the concluding note in the survey report said.

“The overwhelming demand for accountability and equitable governance signals a critical juncture for provincial leadership and institutions.”


Pakistan Stock Exchange crosses 135,000 points as investors continue favoring equities

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Pakistan Stock Exchange crosses 135,000 points as investors continue favoring equities

  • Financial analysts say Pakistani investors are turning to equities on account of “low” fixed income yields
  • PM Shehbaz Sharif credits government policies for PSX surge, vows to provide business-friendly environment

KARACHI: The Pakistan Stock Exchange (PSX) breached the 135,000 points barrier on Monday to reach an all-time high during intraday trading, with financial analysts attributing the surge to investors’ continued preference of equities over fixed income assets. 

The KSE-100 Index reached 135,723.53 points during intraday trading, gaining 1423.77 points or by 1.06 percent from its last close of 134,299.76 points on Friday. Karachi-based brokerage company Topline Securities had attributed the surge to consistent inflows from mutual funds last week, saying investors were continuing to shift from fixed income assets to equity funds.

“The stocks are hitting new highs as investors continue to switch from fixed income asset class to equities,” Shahid Ali Habib, chief executive officer at Arif Habib Limited, told Arab News. 

Habib said investors were turning to equities as fixed income yields were low, adding that investors are “continuously getting confidence that it will continue to remain low for next year too.”

“More liquidity is coming and the investors are trying to identify new alpha stocks,” the analysts noted. 

State broadcaster Radio Pakistan credited the government’s economic policies for the bullish trend at the stock market. 

“The continued upward trend in the stock exchange reflects the increasing confidence of the trade and business community on economic policies introduced by the government,” Radio Pakistan reported. 

In a statement, Prime Minister Shehbaz Sharif expressed happiness over the surge in the stock market. 

“Providing a business-friendly environment in the country is our top priority,” the Pakistani premier said. 

Sharif said Pakistan had now embarked on the path to economic growth, saying the government is working tirelessly for national development and the public’s welfare. 


Pakistan says formulating national policy to counter India’s ‘water aggression’

Updated 14 July 2025
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Pakistan says formulating national policy to counter India’s ‘water aggression’

  • India suspended decades-old Indus Waters Treaty in April after accusing Pakistan of involvement in attack that killed 26 people
  • Planning minister says Pakistan will form committee of water experts, engineers for recommendations to address water disputes

ISLAMABAD: Planning Minister Ahsan Iqbal announced this week that Islamabad was formulating a comprehensive national policy to counter India’s move to suspend a decades-old water-sharing treaty with Pakistan, stressing that it aims to safeguard the country’s water resources.

India announced its decision to suspend the Indus Waters Treaty, signed between the two countries in 1960, after Delhi blamed Islamabad for being involved in an attack in Indian-administered Kashmir that killed 26 people on April 22.

Islamabad denied involvement in the incident.

Pakistan has warned Delhi’s move to suspend the treaty that guarantees water access for 80 percent of Pakistan’s farms, can trigger a nuclear war between the two countries. 

“Minister for Planning and Development Ahsan Iqbal says a comprehensive national policy is being formulated in consultation with all four provinces to counter Indian water aggression,” state broadcaster Radio Pakistan reported on Sunday.

Iqbal said the policy aims to safeguard Pakistan’s water resources in the face of ongoing regional challenges, referring to India’s move to hold the treaty in abeyance. 

“The minister announced to establish a special technical committee comprising water experts and engineers to provide technically sound recommendations to address water disputes and related challenges,” the report said. 

TREATY’S HISTORY

The Indus Waters Treaty took effect on April 1, 1960, and was officially signed on September 19, 1960, in Karachi by Pakistan’s then President Ayub Khan and India’s then Prime Minister Jawaharlal Nehru.

As per the treaty, Pakistan has rights to the western rivers— Indus, Jhelum, and Chenab— for irrigation, drinking, and non-consumptive uses like hydropower. India controls the eastern rivers— Ravi, Beas, and Sutlej— for unrestricted use but must not significantly alter their flow.

India can use the western rivers for limited purposes such as power generation and irrigation, without storing or diverting large volumes. Experts, like Hassaan F. Khan from Tufts University, argue that India lacks the infrastructure to divert large amounts of Indus waters.

The treaty also created a permanent Indus Commission and a dispute resolution framework, and despite wars and decades of tensions between Pakistan and India, it remains one of the world’s most resilient water-sharing agreements.

There is no provision in the treaty for either country to unilaterally suspend or terminate the pact, which has clear dispute resolution systems.

The April 22 attack triggered a days-long conflict between India and Pakistan in early May, raising fears of a nuclear war before US President Donald Trump intervened and brokered a ceasefire on May 10. 

The conflict killed over 70 people on both sides of the border, with both countries claiming victory over the other. Pakistan and India both dispatched delegations to world capitals in June to defend their stances regarding the conflict. 

India and Pakistan have fought two out of three wars in the past seven decades over the disputed Himalayan Kashmir territory. Both sides claim the valley in full but administer only parts of it.


Pakistan assures UN chief of commitment to ensure peaceful resolution of conflicts 

Updated 14 July 2025
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Pakistan assures UN chief of commitment to ensure peaceful resolution of conflicts 

  • UN Secretary General António Guterres calls Deputy PM Ishaq Dar, says Pakistan’s foreign office
  • Pakistan is currently the president of the United Nations Security Council for the month of July

ISLAMABAD: Pakistan’s Deputy Prime Minister Ishaq Dar this week assured United Nations Secretary General António Guterres of Islamabad’s “strong commitment” to work for peaceful resolution to conflicts as president of the UN Security Council, the Pakistani foreign office said. 

Pakistan assumed the presidency of the Security Council for July 2025 earlier this month. Islamabad has said it is mindful of the multiple challenges to international peace and security across the Middle East, South Asia, Africa, Europe, Latin America and other regions in today’s world.

Dar, who also serves as Pakistan’s foreign minister, received a telephone call from Guterres on Sunday night, Pakistan’s foreign ministry said in a statement. 

 “As Pakistan holds the Presidency of the UN Security Council for the month of July, the DPM/FM reaffirmed Pakistan’s strong commitment to international peace and security, and to the pacific settlement of disputes,” the foreign office said.

“He also highlighted the Signature Events being convened by Pakistan during its Presidency to advance these objectives.”

The statement said both leaders also looked forward to engaging in New York next week during activities related to Pakistan’s presidency of the UN Security Council. 

“The DPM/FM further reiterated Pakistan’s continued support in facilitating the United Nations and its personnel in the effective discharge of their mandate,” the statement added. 

Pakistan assumed the presidency of the UNSC at a critical time, with conflicts in the Middle East and Ukraine refusing to let up. Israel has killed over 57,000 Palestinians in Gaza since October 2023, in response to Hamas’ lightning attack. In June, it engaged in a conflict with Iran after attacking its nuclear facilities and military leadership. 

Pakistan has repeatedly condemned Israel’s military actions against Palestine, Iran and other Middle Eastern countries since the 2023 conflict began. Islamabad has called for a peaceful resolution to the conflict and stated that lasting peace in the Middle East can only be achieved through the establishment of an independent Palestinian state, based on the pre-1967 borders with Al Quds Al Sharif as its capital.


Pakistan requests Saudi Arabia to increase Hajj pilgrims’ quota to 230,000

Updated 14 July 2025
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Pakistan requests Saudi Arabia to increase Hajj pilgrims’ quota to 230,000

  • Pakistan received a quota of 179,210 pilgrims from Saudi Arabia for Hajj 2025, split evenly between government and private schemes
  • Saudi authorities working on digitizing Hajj management system to ensure easier, more efficient services, says religious affairs minister

ISLAMABAD: Islamabad has formally requested Saudi Arabia to increase its Hajj pilgrims’ quota to 230,000, Pakistan’s Minister for Religious Affairs Sardar Muhammad Yousaf said this week, according to state-run media, as the country hopes more people can perform the annual Islamic pilgrimage. 

Pakistan received a quota of 179,210 pilgrims from Saudi Arabia for Hajj 2025, evenly divided between the government and private Hajj operators. For this year’s pilgrimage, Islamabad has already concluded the registration process, with state media reporting that the country has received over 450,000 Hajj applications in total. 

“He [Yousaf] noted that Pakistan has formally requested the Saudi government to increase the Hajj quota to 230,000, in proportion to the country’s population to allow more people to undertake the pilgrimage,” the state-run Pakistan Television News reported on Sunday. 

The minister was on a visit to Darul Uloom Mansehra where he attended a reception in his honor. Yousaf said the increase in the number of people registering for Hajj 2026, over 450,000, reflects that the trust of the public has been restored in Pakistan’s religious affairs ministry. 

“Furthermore, the minister said that the Saudi authorities are working on digitizing the Hajj management system, which will ensure easier and more efficient services for pilgrims in the future,” PTV News reported. 
A major portion of the private quota for Hajj pilgrims for 2025 remained unutilized due to delays by companies in meeting payment and registration deadlines, while the government filled its full allocation of over 88,000 pilgrims.

Private operators blamed the situation on technical glitches such as payment issues and communication breakdowns.