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–Inflation accelerates slightly as food and wholesale prices push monthly gains higher across urban and rural regions
BeNewz Report
ISLAMABAD: Country’s Consumer Price Index inflation rose 7.3% year-on-year in March 2026, according to data released by Pakistan Bureau of Statistics, reflecting a modest uptick from 7.0% recorded in February and sharply higher than 0.7% in March last year.
On a month-on-month basis, CPI inflation increased 1.2% in March, compared with 0.3% in February and 0.9% in the same month a year earlier, indicating renewed price pressures across key consumption categories. The acceleration highlights persistent volatility in food and energy costs, which remain major drivers of household inflation.
Urban inflation climbed 7.4% year-on-year in March, up from 6.8% in February and 1.2% a year earlier, reflecting stronger price momentum in cities. Monthly urban inflation rose 1.3%, compared with 0.3% in the previous month. Analysts attribute the increase to rising perishable food prices and higher transport costs, particularly during Ramadan-driven demand cycles.
Rural inflation showed a slightly different trend, easing marginally to 7.2% year-on-year from 7.3% in February. However, the monthly increase remained notable at 1.0%, compared with 0.3% in February. Rural areas continue to face pressures from food supply disruptions and input cost increases in agriculture, which often pass through to consumer prices with a lag.
Pakistan’s broader price indicators also signaled upward momentum. Sensitive Price Indicator inflation rose 5.6% year-on-year in March, compared with 4.8% in February, reversing a contraction of 2.3% recorded a year earlier. On a monthly basis, SPI increased 0.7%, recovering from a slight decline in February. SPI tracks weekly essential commodities and is often seen as an early signal of inflationary trends affecting lower-income households.
Wholesale Price Index inflation showed the sharpest increase, rising 6.7% year-on-year in March compared with just 1.0% in February and a contraction of 1.6% last year. On a monthly basis, WPI surged 5.9%, indicating strong upstream cost pressures. Economists say this trend could translate into further consumer inflation in coming months as producers pass higher costs to consumers.
Pakistan’s inflation trajectory has remained volatile over the past two years, following a peak above 30% in 2023 amid currency depreciation and energy price adjustments. According to the State Bank of Pakistan, inflation has gradually moderated due to tighter monetary policy and easing global commodity prices, but risks persist due to exchange rate movements and fiscal adjustments.
Recent data from the central bank shows average inflation for FY2025 remained above its medium-term target range of 5–7%, underscoring structural price pressures in the economy. Food inflation continues to account for a large share of CPI fluctuations, particularly in rural areas where household spending is heavily concentrated on essentials.
Government policy measures, including subsidy rationalization and energy tariff adjustments under the International Monetary Fund program, have also contributed to price increases. These reforms aim to stabilize public finances but often lead to short-term inflationary spikes.
Pakistan’s agriculture sector, which contributes nearly 20% to GDP according to official estimates, plays a critical role in shaping inflation outcomes. Improved crop output and better supply chain management have historically helped ease food inflation, but recent weather disruptions and input cost increases have limited these gains.
Global commodity trends remain another key factor. International oil prices and imported food costs directly impact Pakistan’s inflation due to its reliance on imports. Data from multilateral institutions indicates that even modest increases in global prices can quickly feed into domestic inflation through exchange rate pass-through.
The latest inflation reading comes as policymakers assess the pace of monetary easing after a period of aggressive rate hikes. The central bank has signaled a cautious approach, noting that while inflation has declined from peak levels, underlying pressures remain.
Looking ahead, economists expect inflation to remain within a moderate range but warn of upside risks from energy price adjustments and fiscal measures. The March data reinforces concerns that disinflation may slow, particularly if wholesale price increases continue feeding into retail markets. Pakistan CPI inflation is likely to remain a key policy focus as authorities balance growth and price stability in the coming months.
