Pakistan's weekly inflation accelerated to 12.15% year-on-year in the second week of April, as last week's historic fuel price increase began cascading through the economy, driving up costs across transport, food, and essential commodities, according to official data.
On a week-on-week basis, the Sensitive Price Indicator (SPI) rose by 1.93%, reflecting the immediate impact of the government's decision to raise petrol and diesel prices.
The surge follows the April 3 fuel price adjustment, which raised petrol by PKR 137.24 per liter to PKR 458.41 and diesel by PKR 184.49 per liter to PKR 520.35, driven by the escalating US-Israeli conflict with Iran that has sent global crude oil prices to record highs.
According to data released by the Pakistan Bureau of Statistics (PBS), year-on-year, the biggest increase was observed in the prices of diesel (101.02%), LPG (65.86%), petrol (48.7%), onions (37.8%), and wheat flour (30.1%).
On a week-on-week basis, the largest increases were observed in the prices of diesel (54.71%), petrol (17.86%), tomatoes (9.35%), LPG (8.61%), and potatoes (4.13%).
The items whose prices saw the biggest decrease included garlic (3.78%), bananas (3.39%), chicken (1.05%), wheat flour (0.73%), and vegetable ghee 2.5kg (0.24%).
Pakistan tracks inflation weekly and monthly. The former is called the SPI, while the latter is tracked through the Consumer Price Index (CPI).
The SPI, which tracks the prices of 51 essential commodities from 50 markets across 17 cities, is used as a key gauge of short-term inflation trends.
During the week ended April 9, out of 51 items, the prices of 28 (54.90%) items increased, 8 (15.69%) items decreased and 15 (29.41%) items remained stable.
The week's data captured the full impact of the fuel price increase, with diesel prices surging 54.71% week-on-week and 101.02% year-on-year, while petrol jumped 17.86% week-on-week and 48.70% year-on-year. LPG continued its upward climb with an 8.61% weekly increase and 65.86% annual surge. Energy charges remained elevated with electricity for Q1 unchanged at PKR 7.47 per unit and gas charges up nearly 30% annually.
In March, the CPI or headline inflation increased to 7.3% from 7% in February, marking the highest level in 19 months. On a month-on-month basis, inflation rose 1.2% in March compared to 0.3% in February, reflecting growing price pressures amid rising fuel costs and regional tensions.
In early March, the State Bank of Pakistan (SBP) kept the key policy rate unchanged at 10.5% for the second consecutive meeting, citing heightened uncertainty from the Middle East conflict and rising global oil prices. The decision came after the central bank had slashed rates by 1,150 basis points cumulatively since June 2024.
The MPC noted that the conflict in the Middle East has led to a sharp increase in global fuel prices as well as freight and insurance costs, while also affecting cross-border trade and travel. The central bank projects inflation to largely stay within the 5-7% range in FY26, though the outlook remains subject to risks from volatile international commodity prices, global trade uncertainty, and unanticipated adjustments in domestic administered energy prices.
SBP Governor Jameel Ahmed said the central bank expects real GDP growth to remain within the projected range of 3.75-4.75% for FY26, though the outlook remains subject to risks from ongoing geopolitical developments.
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