Pakistan’s annual inflation accelerates to 4.1% in July

A vendor fills a sack with rice in a wholesale shop at a market in Karachi, Pakistan, on April 3, 2025. (AP/File)
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Updated 01 August 2025
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Pakistan’s annual inflation accelerates to 4.1% in July

  • The central bank left the key interest rate unchanged at 11% this week
  • The SBP said the policy rate would keep inflation between 5%-7% range

ISLAMABAD: Pakistan’s consumer inflation accelerated to 4.1% year-on-year in July, up from 3.2% in June, driven by rising prices for food items, fuels and medicines, the statistics bureau said 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 program, including a contractionary government budget passed in June that slashes spending to curb the fiscal deficit.


Pakistan bank enables Shariah-compliant digital payment facility for passengers at Islamabad airport

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Pakistan bank enables Shariah-compliant digital payment facility for passengers at Islamabad airport

  • Pakistan is a cash-dominated market where a significant portion of transactions in the informal sector are made without any taxes, officials say
  • The move comes amid Pakistan’s efforts to introduce a cashless model at airports under which only digital service providers can provide services

KARACHI: Aik, Pakistan’s first Islamic digital bank, has enabled fully digital payments at Islamabad International Airport to offer travelers and passengers secure, Shariah compliant digital transaction facility.

The development comes amid Pakistan’s efforts to introduce a cashless model at airports across the country, under which only digital service providers can provide services to customers.

Aik, a subsidiary of Bank Islami, said it has onboarded merchants across the Islamabad airport and integrated QR code deployments at key touchpoints to allow passengers and visitors to make secure, seamless, and Shariah-compliant digital transactions at all counters, retail outlets, and service points.

It said the implementation complies with the regulations and framework set by the State Bank of Pakistan (SBP) and is a working model for a large-scale adoption of cashless systems in public infrastructure.

“This deployment reflects our commitment to building practical digital infrastructure that improves everyday transactions,” Aik Chief Officer Ashfaque Ahmed said in a statement.

“By enabling a fully cashless environment at a major national gateway, we are supporting efficiency, transparency, and financial inclusion at scale. This is not only a project; it is a foundation for Pakistan’s cashless future.”

Pakistan is a cash-dominated market where a significant portion of transactions, particularly in the informal sector, are conducted in cash. Officials say many of these transactions are aimed at avoiding taxes.

In recent years, the SBP has taken steps to ensure a transition toward a more cashless economy so that transactions are more traceable, reducing chances of tax evasion and corruption.

By digitizing Islamabad airport, aik said it continues to invest in secure and accessible financial solutions that “expand digital participation and support national economic modernization.”