Pakistan’s annual inflation rose to 7 percent in February, marking a noticeable jump from the previous month, according to fresh data released by the Pakistan Bureau of Statistics on Monday.
The reading was in line with the Ministry of Finance’s earlier estimate of 6 to 7 percent for the month. In January, headline inflation stood at 5.8 percent, while in February last year it was much lower at 1.5 percent.
The new figure shows that price pressures are picking up again after remaining relatively contained in recent months.
Prices inch up month on month
On a monthly basis, inflation rose by 0.3 percent in February. This was slightly lower than the 0.4 percent increase recorded in January. In February last year, prices had actually fallen by 0.8 percent compared to the previous month.
For many households, the small monthly rise may not sound alarming. But when added up over time, such increases can make daily expenses harder to manage. Food, transport and utility bills remain key concerns for families already coping with tight budgets.
For the first eight months of the current fiscal year, average inflation stood at 5.46 percent. This is slightly lower than the 5.85 percent recorded during the same period last year. While this suggests some overall improvement, the recent monthly trend shows that pressures have not fully eased.
Urban and rural areas both affected
The data also showed that inflation was felt across both cities and rural areas.
In urban areas, consumer prices rose 6.8 percent year on year in February. This was higher than the 5.8 percent increase seen in January and well above the 1.8 percent recorded in February 2025. On a monthly basis, urban prices rose by 0.3 percent.
In rural areas, inflation was even higher at 7.3 percent year on year. That compares with 5.8 percent in January and 1.1 percent a year earlier. Month on month, rural prices also increased by 0.3 percent.
The figures suggest that rising costs are not limited to major cities. People living in smaller towns and villages are also facing higher expenses.
Forecasts and policy response
In its Monthly Economic Update and Outlook for February, the Finance Division had projected inflation to fall within the 6 to 7 percent range. The actual figure of 7 percent sits at the top end of that estimate.
Earlier, Optimus Capital Management had predicted that inflation could reach 7.4 percent in February, citing pressure from rising electricity tariffs and gold prices.
Last month, the State Bank of Pakistan decided to keep its key policy rate unchanged at 10.5 percent during its first Monetary Policy Committee meeting of 2026. The move came as a surprise to many in the market, who had expected a rate cut.
Speaking at a press conference, SBP Governor Jameel Ahmad said inflation could remain above 7 percent in the second half of the current fiscal year.
By keeping the interest rate unchanged, the central bank signalled that it wants to stay cautious. Higher interest rates can help control inflation, but they also make borrowing more expensive for businesses and consumers.
For now, the latest data shows that while inflation is not at crisis levels, it is moving upward again. Whether this trend continues will depend on global commodity prices, domestic energy costs and the government’s economic decisions in the coming months.
Read next: Weekly inflation in Pakistan dips as potato, onion prices fall
