Pakistan’s annual inflation rose to 4.1% in July, up from 3.2% a month earlier, due to surging costs of food, fuel and medicines, official data showed on Friday.

July's consumer price inflation month-on-month was 2.9%, the bureau said.

The higher inflation reading follows the State Bank of Pakistan's assessment of a deteriorating inflation outlook, leading it to leave the key interest rate unchanged at 11%.

The bank's monetary policy committee said on Wednesday that energy prices, particularly for gas, had risen more than expected, and it considered the real policy rate should be adequately positive to keep inflation in the 5%–7% target range.

Pakistan is pushing through a series of economic reforms under a $7 billion International Monetary Fund programme, including a contractionary government budget passed in June that slashes spending to curb the fiscal deficit.

According to the statistics released by the PBS, SPI inflation decreased by 0.9% year-on-year in July as compared to a decrease of 1.9% a month earlier and an increase of 15.7% in July 2024.

On MoM basis, it increased to 3.1% in July 2025 as compared to no change in a month earlier and an increase of 2.0% in July 2024.

During the week, out of 51 items, prices of 11 items increased, 12 items decreased and 28 items remained stable.

The items, which recorded major increase in their average prices on a week-on-week basis included tomatoes (17.26%), chicken (4.76%), bananas (2.97%), pulse moong (1.55%), LPG (1.39%), potatoes (0.73%), pulse mash (0.61%), wheat flour (0.59%) and pulse gram (0.58%).

The commodities which recorded major decrease in their average prices on a week-on-week basis included eggs (1.80%), firewood (1.11%), cooked beef (1.08%), powdered milk (0.49%), energy saver (0.25%), garlic (0.24%), cigarettes and mutton (0.13%) each, beef (0.10%), gur (0.04%) and onions (0.02%).

Year-on-year basis, the commodities that witnessed decrease in prices included onions (49.32%), tomatoes (42.31%), garlic (23.78%), wheat flour (22.90%), pulse mash (21.40%), tea packet (17.93%), potatoes (15.95%), chicken (11.71%), electricity charges for Q1 (10.02%) and lpg (0.86%).

The commodities which recorded a increase in their average prices on year-on-year basis included ladies sandal (55.62%), gas charges for Q1 (29.85%), sugar (21.66%), pulse moong (14.27%), beef (14.16%), vegetable ghee 2.5 kg (12.33%), vegetable ghee 1 kg (11.95%), firewood (11.75%), gur (11.23%), eggs (10.94%), cooked beef (9.31%) and lawn printed (7.32%).