Pakistan’s inflation rose slightly in March, although it remained below the government’s earlier projections, according to official data released on Wednesday.
Figures from the Pakistan Bureau of Statistics showed that headline inflation stood at 7.3 percent year-on-year in March 2026. The reading was lower than the Ministry of Finance’s estimate of 7.5 percent to 8.5 percent for the month.
The latest number marks a small increase from February, when inflation was recorded at 7 percent, indicating a gradual pickup in price pressures.
Forecasts and contributing factors
Market expectations were largely aligned with the official data. Arif Habib Limited had projected inflation at around 7.6 percent, while JS Global expected it to come in near 7.3 percent.
Analysts said the year-on-year rise was partly due to a low base from March last year, when inflation was unusually subdued. This made the current increase appear more pronounced in comparison.
Outlook remains cautiously positive
The government has maintained a cautiously positive view of the near-term economic outlook, despite warning of external risks. In its latest Monthly Economic Update, the Finance Division noted that rising global oil prices could increase the country’s import bill and add pressure to inflation going forward.
It also highlighted the risk of supply chain disruptions, which may push up industrial input costs.
On the positive side, strong remittance inflows are expected, particularly around the Eid period, although their pace will depend on economic conditions in host countries. Growth in IT exports is also helping support foreign exchange earnings.
Economic indicators show improvement
Recent data points to improving momentum in the economy. The current account posted a notable surplus in February, supported by higher remittances and a decline in imports.
Foreign exchange reserves have climbed to a four-year high, reflecting improved external stability. At the same time, large-scale manufacturing recorded double-digit growth in January, signalling a recovery in industrial activity.
The government said it is continuing with measures such as maintaining fuel reserves, managing energy demand, and following fiscal discipline to support stability.
While global uncertainties, including rising oil prices and geopolitical tensions, remain a concern, officials believe the economy is better positioned to handle external pressures and sustain growth in the coming months.
Read next: Essential food items drive increase in weekly inflation
