Pakistan’s inflation rate moved higher in April, exceeding official expectations and signalling renewed pressure on household budgets.
Data released by the Pakistan Bureau of Statistics on Friday showed that headline inflation stood at 10.9 percent year-on-year in April 2026. The reading was notably above the Ministry of Finance’s earlier projection of 8 to 9 percent for the month.
The latest figure also marks a sharp increase from March, when inflation was recorded at 7.3 percent. A year earlier, in April 2025, inflation had remained very low at just 0.3 percent.
On a monthly basis, prices rose by 2.5 percent in April, picking up from a 1.2 percent increase in March. In contrast, prices had declined by 0.8 percent during the same month last year.
Urban and rural prices move up
Inflation showed a similar upward trend across both urban and rural areas. In cities, prices rose by 11.1 percent compared to April last year, up from 7.4 percent in March. Month-on-month, urban inflation increased by 2.7 percent.
In rural areas, inflation reached 10.6 percent year-on-year, compared to 7.2 percent in the previous month. On a monthly basis, rural prices rose by 2.1 percent.
For the first ten months of the current fiscal year, average inflation stood at 6.19 percent, higher than 4.73 percent recorded in the same period last year.
Forecasts miss the mark
The Finance Division had earlier expected inflation to remain in single digits. In its latest monthly outlook, it cited supply chain disruptions linked to tensions in the Middle East as a risk factor but still projected inflation within the 8 to 9 percent range.
Market analysts had also underestimated the rise. Insight Securities’ Head of Research, Muhammad Shahroz, had projected inflation at around 10.1 percent for April.
According to his assessment, the increase was driven by a low base effect along with higher food and housing costs. He also pointed to rising fuel and LPG prices as key reasons behind the monthly jump.
Interest rate hike follows
The rebound in inflation has already prompted action from the State Bank of Pakistan, which raised its key policy rate by 100 basis points to 11.5 percent earlier this week. This marks the first rate hike in three years and signals concern over growing price pressures.
The latest data suggests inflation may remain a challenge in the coming months, particularly if energy and food prices continue to rise.
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