Sherman Expects 3.4% Inflation in June 2025
Staff Report
Islamabad: Sherman has expected headline inflation in June 2025 to be reported at 3.54%YoY, slightly higher than 3.45%YoY recorded in the previous month.
This increase is primarily attributed to a pickup in energy and food prices and a low base effect from the previous year. On a monthly basis, CPI is expected to increase by 0.5%MoM in June’25.
Sherman projects LOTCHEM’s acquisition price of Rs 26
Despite a decrease in the heavy-weighted wheat flour (down 14.7%YoY) the food sector is expected to grow by 3.6%YoY mainly due to increase in price of Sugar (up 26.8%YoY), Eggs (up 33%YoY), Beef (up 13.8%YoY) and Fresh Milk (up 9%YoY).
On a MoM basis, the food index is expected to increase by 0.53%, driven by increasing prices of Sugar and Eggs by 3.7%MoM and 17.4%MoM respectively, however we expect a decline in prices of Tomatoes and Chicken by 30.7%MoM and 20.5%MoM respectively. The housing index is anticipated to decrease by 4.5%YoY.
This YoY decrease is primarily driven by a major decline in electricity charges (down 34.5%YoY), mainly due to a power tariff cut following power sector reforms and decline in international oil prices by 18%. However, on monthly basis it is expected to remain flat at 0.1%MoM in June’25.
FY25 CPI to be around 4.6% – Lowest in 9 Years Pakistan’s FY25 NCPI to clock in at 4.6%YoY. Major reason behind slowdown in CPI is decline in food sector by 0.51%YoY.
Thus, after a gap of 3 years, Pakistan’s NCPI will be in single digit and is lower than last decade average CPI of 10.8%. Just to recall, due to geo-political events and local energy sector reforms, Pakistan saw hyperinflation during last 5 years where we saw average CPI of 16.8%.
