Pakistan's weekly inflation up 4.23% due to higher gas, electricity prices

Pakistan's inflation increased 4.23% in the fourth week of February, even as weekly prices declined due to lower food costs, according to official data.

On a week-on-week basis, the Sensitive Price Indicator (SPI) decreased by 0.54%.

According to data released by the Pakistan Bureau of Statistics (PBS), the highest year-on-year increase was observed in the prices of gas charges (29.85%), wheat flour (29.51%), electricity charges (17.33%), tomatoes (16.83%), and chili powder (15.20%).

The highest week-on-week decreases were observed in the prices of tomatoes (29.67%), potatoes (10.62%), chicken (9.03%), onions (7.44%), and eggs (3.43%). The items whose prices saw the highest increase included bananas (4.49%), shirts (1.36%), and LPG (0.86%).

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 ending on February 26, out of 51 items, the prices of 13 (25.49%) items increased, 14 (27.45%) items decreased and 24 (47.06%) items remained stable.

Pakistan’s headline inflation is expected to climb to 7.2% year-on-year in February, marking the highest reading since July 2024, mainly due to a low base effect and seasonal price pressures during Ramadan, according to a report by Taurus Securities Limited.

In January, the CPI or headline inflation rose slightly to 5.8% from 5.6% in December, but remained within the State Bank of Pakistan's 5-7% target range.

Earlier this year, the State Bank of Pakistan (SBP) kept the key policy rate unchanged at 10.5% in its first monetary policy decision of 2026, defying market expectations of a cut. The decision came after the central bank had slashed rates by 1,150 basis points cumulatively since June 2024.

SBP Governor Jameel Ahmed said core inflation has persisted around 7.4% in recent months, while the outlook suggests it could exceed 7% in some months of the second half of fiscal year 2026. He projected GDP growth of 3.75-4.75% for the current fiscal year, higher than the IMF's forecast.