Short-term inflation in Pakistan presented a mixed picture for the week ending December 4, 2025, offering households some immediate relief while remaining elevated on an annual basis. The latest data from the Sensitive Price Indicator (SPI) reveals a notable weekly decline, though prices continue to outpace last year's levels.
Annual and Weekly Inflation Trends
The SPI, which tracks prices of 51 essential items across 17 cities, recorded a year-on-year increase of 4%. This marks a significant moderation from the double-digit inflation readings that have plagued the economy in recent years. On a week-on-week basis, the indicator provided more direct relief, falling by a sharp 0.64%. The combined SPI index stood at 335.84, down from 337.99 the previous week.
Major Price Drivers and Relief Items
Over the past twelve months, several items saw dramatic price hikes. Sugar led the surge with a staggering 37.49% increase, followed by first-quarter gas charges (29.85%), wheat flour (17.50%), gur (15.06%), beef (13.47%), and firewood (12.59%). Other significant annual increases were noted in bananas, powdered milk, high-speed diesel, printed lawn, cooking oil, and vegetable ghee.
In stark contrast, substantial annual relief came from key kitchen staples. Potatoes became 40.47% cheaper compared to the same week in 2024. Garlic prices fell 38.51%, tomatoes dropped 31.51%, onions declined 29.87%, and pulse gram decreased by 29.54%. Lipton tea, pulse mash, electricity charges, and packaged salt also saw significant annual price reductions.
Weekly Price Movements and Impact on Households
The weekly decline of 0.64% was primarily fueled by a sharp correction in perishable food prices. Tomatoes plunged 30.11% in just one week, while onions dropped 12.41%, potatoes fell 6.92%, and chicken eased 4.46%. Sugar, a persistent inflation driver, also softened by 3.31% over the week. Pulses, gur, petrol, and high-speed diesel contributed further to the weekly deflation.
However, not all items followed the downward trend. Liquefied petroleum gas (LPG) jumped 3.50%, garlic rose 1.86%, and cooking oil and fats saw modest increases. Eggs, bread, powdered milk, and cigarettes also posted small weekly gains. Of the 51 items tracked, prices rose for 13, fell for 15, and remained unchanged for 23.
The relief was not evenly distributed across income groups. The poorest households (Quintile 1) experienced the largest weekly relief at 0.96% and the lowest annual inflation at 3.31%. Middle-income groups faced a slightly higher year-on-year inflation reading of around 4.2%.
Analysis and Outlook
The continued easing of weekly inflation reflects improved supplies of seasonal vegetables, falling international oil prices, and a relatively stable rupee. This combination has provided a welcome respite for consumers after years of intense price pressures. Analysts suggest the downward trend in weekly inflation could persist in the coming weeks, barring any disruptions from fresh adjustments to energy tariffs or increased winter demand pressures. The data indicates a cautiously optimistic short-term outlook for price stability in essential commodities.
