Pakistan Wholesale Prices YoY: December 2025 Analysis and Macroeconomic Implications
Key Takeaways: Pakistan’s Wholesale Prices Index (WPI) YoY held steady at 1.10% in December 2025, matching November’s reading but falling short of the 1.90% consensus estimate. This marks a continued moderate inflation environment following a volatile year that saw negative WPI prints mid-2025. The data reflects easing cost pressures amid cautious monetary policy and fiscal consolidation efforts. External shocks and geopolitical tensions remain key downside risks, while structural reforms could support longer-term price stability.
Table of Contents
The latest Wholesale Prices YoY for Pakistan, released on December 1, 2025, shows a 1.10% increase, unchanged from November’s figure but below the 1.90% market estimate. This steady pace contrasts sharply with the negative WPI prints recorded in August (-0.49%) and September (-1.00%) 2025, signaling a recovery from deflationary pressures earlier in the year. The 12-month average WPI now stands near 0.40%, reflecting a subdued inflation environment compared to the 2024 peak of 7.30%.
Drivers this month
- Energy prices stabilized, contributing 0.30 percentage points to WPI growth.
- Food wholesale prices edged up 0.40%, driven by seasonal supply constraints.
- Manufacturing input costs remained flat, reflecting subdued domestic demand.
Policy pulse
The current WPI reading remains below the State Bank of Pakistan’s inflation target range of 5-7%, suggesting limited immediate pressure on monetary tightening. The central bank’s cautious stance is supported by moderate wholesale inflation and easing financial conditions.
Market lens
Immediate reaction: The Pakistani rupee (PKRUSD) strengthened 0.30% within the first hour post-release, reflecting relief at contained inflation. Short-term government bond yields fell by 5 basis points, signaling reduced inflation risk premia.
Wholesale Prices YoY is a critical gauge of underlying inflationary trends in Pakistan’s economy. The 1.10% reading aligns with other core macro indicators signaling moderate price pressures. Consumer Price Index (CPI) inflation for November 2025 was reported at 4.80% YoY, down from 6.20% in mid-2025. Industrial production growth slowed to 2.10% YoY, reflecting cautious business sentiment amid global uncertainties.
Monetary Policy & Financial Conditions
The State Bank of Pakistan has maintained its policy rate at 14%, balancing inflation control with growth support. Liquidity conditions have eased slightly, with the overnight repo rate hovering near 13.80%. Credit growth remains muted at 5.50% YoY, consistent with the moderate wholesale inflation backdrop.
Fiscal Policy & Government Budget
Fiscal consolidation efforts continue, with the government targeting a primary deficit reduction to 1.50% of GDP in FY2026. Revenue mobilization has improved, but subsidies on fuel and food remain a fiscal drag. These measures help contain inflationary pressures by limiting demand-side overheating.
Comparing the current print to the 12-month average of 0.40% and the previous month’s 1.10%, the WPI shows a stable but moderate inflation environment. This contrasts with the 2024 peak of 7.30%, highlighting the effectiveness of recent monetary and fiscal policies in containing inflation.
This chart reveals a trend of stabilization in wholesale prices after a mid-year dip into deflation. The steady 1.10% reading suggests inflationary pressures are contained but persistent, requiring ongoing policy vigilance to avoid renewed spikes.
Market lens
Immediate reaction: The PKRUSD currency pair appreciated by 0.30% post-release, reflecting market confidence in controlled inflation. Short-term yields on Pakistan government bonds declined by 5 basis points, indicating reduced inflation risk expectations.
Looking ahead, Pakistan’s wholesale inflation trajectory will depend on several factors. The base case scenario (60% probability) projects WPI to remain near 1.00-1.50% in early 2026, supported by stable energy prices and moderate demand. A bullish scenario (20% probability) sees WPI easing below 1.00%, driven by stronger fiscal discipline and improved agricultural output. Conversely, a bearish scenario (20% probability) risks WPI rising above 2.50% if external shocks, such as commodity price spikes or geopolitical tensions, intensify.
External Shocks & Geopolitical Risks
Pakistan remains vulnerable to global commodity price volatility and regional geopolitical tensions, particularly in energy markets. Any disruption could quickly translate into higher wholesale prices, complicating inflation control efforts.
Structural & Long-Run Trends
Structural reforms in supply chains, energy subsidies, and agricultural productivity are critical for sustainable inflation control. Long-run trends suggest that without these reforms, Pakistan risks periodic inflation spikes despite short-term policy successes.
Pakistan’s Wholesale Prices YoY at 1.10% in December 2025 signals a cautiously optimistic inflation environment. The data reflects a recovery from mid-year deflation and aligns with moderate CPI inflation and stable monetary policy. However, external risks and structural challenges remain. Policymakers must balance growth support with inflation vigilance to maintain macroeconomic stability. Continued fiscal consolidation and structural reforms will be key to anchoring inflation expectations and supporting sustainable growth.
Key Markets Likely to React to Wholesale Prices YoY
Wholesale Prices YoY data significantly influences Pakistan’s currency, bond, and equity markets. The PKRUSD forex pair often reacts swiftly to inflation prints, reflecting changes in monetary policy expectations. Government bond yields adjust to inflation risk, while select equity sectors, especially energy and consumer staples, track wholesale price trends closely. Crypto markets show limited direct correlation but may react to broader macro sentiment shifts.
- PKRUSD – Directly impacted by inflation-driven monetary policy shifts.
- KSE100 – Pakistan’s benchmark equity index sensitive to inflation and economic growth.
- PSX – Reflects broader market sentiment tied to macroeconomic data.
- BTCUSD – Crypto market sentiment can shift with macroeconomic risk appetite.
- USDINR – Regional currency pair influenced by similar inflation dynamics.
Wholesale Prices YoY vs. PKRUSD Since 2020
Since 2020, Pakistan’s Wholesale Prices YoY and the PKRUSD exchange rate have shown a moderate inverse correlation. Periods of rising wholesale inflation often coincide with PKR depreciation due to expectations of tighter monetary policy and reduced purchasing power. For example, the 2024 inflation peak at 7.30% coincided with a 12% PKR depreciation against the USD. Conversely, the recent moderation in WPI to 1.10% has supported a 3% PKR appreciation since mid-2025.
| Year | Avg. WPI YoY (%) | PKRUSD Change (%) |
|---|---|---|
| 2020 | 8.50 | -5.20 |
| 2023 | 5.10 | -7.80 |
| 2024 | 7.30 | -12.00 |
| 2025 (YTD) | 1.20 | 3.00 |
FAQs
- What does Pakistan’s Wholesale Prices YoY indicate?
- The Wholesale Prices YoY measures the annual change in wholesale-level prices, reflecting inflationary pressures in the supply chain and signaling future consumer price trends.
- How does the Wholesale Prices YoY affect monetary policy in Pakistan?
- Higher wholesale inflation often prompts the State Bank of Pakistan to tighten monetary policy to control price rises, while lower inflation may allow for easing or stable rates.
- What are the risks to Pakistan’s inflation outlook?
- Risks include global commodity price shocks, geopolitical tensions, currency volatility, and domestic structural inefficiencies that could trigger inflation spikes.
Final takeaway: Pakistan’s Wholesale Prices YoY at 1.10% signals a stable inflation environment but requires vigilant policy and structural reforms to sustain price stability amid external uncertainties.
Sources
- Sigmanomics database, Wholesale Prices YoY Pakistan, December 2025 release.
- State Bank of Pakistan, Monetary Policy Statements 2025.
- Pakistan Bureau of Statistics, CPI and Industrial Production Reports 2025.
- International Monetary Fund, Pakistan Country Report 2025.
The Wholesale Prices YoY at 1.10% in December 2025 is unchanged from November but significantly higher than the negative prints seen in August (-0.49%) and September (-1.00%). The 12-month average WPI has risen from near zero in mid-2025 to 0.40%, indicating a gradual normalization of price pressures after a deflationary phase.
Energy and food prices remain the main contributors to the current WPI level, while manufacturing inputs have shown little change, reflecting subdued demand and stable import costs.