Pakistan’s headline inflation returned to single digits in July 2026, easing to 9.2 percent year on year from 11.1 percent in June, according to data released by the Pakistan Bureau of Statistics (PBS) on Monday.
The latest reading also marks a sharp increase from the 4.1 percent inflation recorded in July last year, showing that while price pressures have eased compared with the previous month, they remain higher than a year ago.
On a monthly basis, the Consumer Price Index (CPI) rose 1.2 percent in July, reversing the 0.3 percent decline seen in June. In July 2025, monthly inflation had increased by 2.9 percent.
Urban inflation slowed to 8.7 percent year on year from 11.2 percent in June, while rural inflation eased to 9.9 percent from 10.9 percent a month earlier. Both urban and rural prices increased by 1.2 percent compared with June.
The latest figure was broadly in line with expectations. Analysts had predicted inflation would return to single digits, although they warned that the improvement was mainly the result of favourable base effects rather than a meaningful drop in underlying price pressures.
Ismail Iqbal Securities had forecast headline inflation at 9.3 percent, describing the decline as largely base driven. JS Global had projected inflation at 9.1 percent for July.
The government’s own outlook had estimated inflation in the range of 9 percent to 10 percent for July, citing the impact of rising global oil prices. The Finance Division also highlighted weaker foreign direct investment, which fell 33.9 percent to $1.64 billion in the last fiscal year from $2.48 billion a year earlier.
The inflation data comes days after the State Bank of Pakistan decided to keep its key policy rate unchanged at 11.5 percent during its first monetary policy meeting of the 2026-27 fiscal year.
SBP Governor Jameel Ahmad had earlier said inflation was expected to decline in July and expressed confidence that it would move towards the upper end of the central bank’s 5 percent to 7 percent target range by the end of the current fiscal year.
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