Pakistan’s weekly inflation eases as food prices drop

Pakistan’s weekly inflation eased by 0.29% for the week ending May 22, largely due to a decline in chicken prices, official data showed Thursday.

The biggest price reductions were recorded in chicken (7.26%), onions (5.43%), garlic (2.71%), liquefied petroleum gas (2.44%), potatoes (0.95%), mustard oil (0.80%), and diesel (0.78%), according to government figures. However, several essential goods saw price hikes, including tomatoes (12.01%), eggs (8.16%), bananas (1.00%), pulse moong (0.79%), wheat flour (0.63%), and beef (0.12%).

On an annual basis, inflation was up 1.35% compared with the same week last year.

Analysts expect Pakistan’s GDP growth target for the 2025-26 fiscal year to range between 3.5% and 4.5%, led by the services sector, with inflation projected to average 5.77%.

Earlier in May, the State Bank of Pakistan cut its benchmark interest rate by 100 basis points to 11%, citing easing inflation and favorable global commodity trends. Analysts attribute the accelerated disinflation to falling food inflation and the absence of anticipated gas tariff hikes.

Despite cooling price pressures, the central bank warned of volatility in wheat and other food items. Officials estimate the country’s wheat crop will reach 29 million tons this year, potentially easing concerns over supply disruptions.