Consumer inflation in Pakistan has surged to nearly 11 percent, marking a significant economic challenge as it returns to double digits for the first time in 21 months. Inflation was recorded at 6.19 percent between July and April last year, up from 4.73 percent during the same period in the previous year.
In April 2026, energy prices rose sharply due to the blockage of the Strait of Hormuz. The last time inflation exceeded 10 percent was in July 2024, when the Consumer Price Index (CPI) reached 11.1 percent.
Key statistics:
- Urban inflation stood at 11.11 percent compared to 10.56 percent in rural areas.
- Food inflation increased by 6.9 percent in urban areas and 7.3 percent in rural areas.
- Core inflation was recorded at 8 percent in urban areas and 8.5 percent in rural areas.
The State Bank of Pakistan responded by increasing its policy rate from 10.50 percent to 11.50 percent. This decision aligns with commitments made to the International Monetary Fund.
Prime Minister Shehbaz Sharif noted that the weekly oil import bill has jumped significantly, from $300 million to $800 million since the onset of the US-Israel war on February 28.
Dr. Ashfaq H. Khan stated that interest rates are a demand-side tool, effective when demand exceeds supply.
The Euro area annual inflation is expected to be 3.0 percent in April, an increase from 2.6 percent in March.