Higher LPG, fuel prices push up Pakistan's weekly inflation to 0.27%

Weekly inflation in Pakistan rose by 0.27% for the week ending June 19, driven by sharp increases in liquefied petroleum gas (LPG), fuel and essential food prices, according to data released by the Pakistan Bureau of Statistics (PBS).

LPG prices surged by 14.86%, while diesel rose by 3.10% and petrol by 1.88%. Key food items, including potatoes (3.75%), gur (2.25%), chicken (2.17%), sugar (2.13%), mustard oil (1.12%) and powdered milk (0.97%), also saw significant price hikes.

However, prices for eggs fell by 9.53%, tomatoes by 5.62%, and garlic by 1.03%. Pulse gram, vegetable ghee and cooking oil also saw minor declines.

Compared to the same week last year, overall inflation decreased by 2.06%.

As expected, annual inflation climbed to 3.5% in May, up from 0.3% in April, due to fading base effects from food prices and persistent core inflation.

Energy prices remained lower than last year, reflecting subdued global oil prices.

The State Bank of Pakistan’s Monetary Policy Committee (MPC), in its latest meeting, kept the policy rate unchanged at 11%. The committee noted that May’s inflation aligned with projections, while core inflation saw a slight decline. Inflation expectations among households and businesses also eased.

The MPC expects inflation to gradually rise and stabilize within the 5-7% target range during fiscal year 2026. However, risks remain from potential supply-chain disruptions, volatile commodity prices and domestic energy price adjustments.

Economic growth is projected to strengthen next year, supported by the lagged effects of previous rate cuts.

The committee emphasized vigilance against inflationary pressures while acknowledging improving growth prospects.