Pakistan's weekly inflation hits 13.98%, highest since November 2024

Pakistan's weekly inflation surged to 13.98% year-on-year in the fourth week of April, the highest reading since November 2024, as energy and food price pressures persisted despite a modest weekly decline in some key commodities, according to official data.

On a week-on-week basis, the Sensitive Price Indicator (SPI) decreased by 0.33%, offering temporary relief after weeks of increases driven by the historic fuel price adjustments earlier this month.

According to data released by the Pakistan Bureau of Statistics (PBS), year-on-year, the biggest increase was observed in the prices of electricity charges for Q1 (54.02%), LPG (50.68%), petrol (44.10%), diesel (36.76%), and wheat flour (36.06%).

Year-on-year, the biggest decrease was observed in the prices of potatoes (47.38%), pulse gram (19.92%), salt powder (13.22%), sugar (11.74%), and pulse masoor (11.47%).

On a week-on-week basis, the biggest decrease was observed in the prices of tomatoes (27.65%), onions (9.35%), diesel (8.35%), LPG (7.08%), and garlic (4.27%).

The items whose prices saw the biggest weekly increase included potatoes (3.13%), bread (0.91%), washing soap (0.85%), cooking oil 5 litre (0.69%), and long cloth (0.65%).

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 23, out of 51 items, the prices of 19 (37.25%) items increased, 9 (17.65%) items decreased and 23 (45.10%) items remained stable.

The weekly decline was driven primarily by a sharp drop in vegetable prices, with tomatoes falling 27.65% and onions down 9.35%, alongside a retreat in diesel and LPG prices from their recent peaks. However, the year-on-year comparison reveals the depth of energy-driven inflation, with electricity charges up over 54% annually following subsidy cuts and revised tariff structures.

In March, the CPI or headline inflation increased to 7.3% from 7.0% 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.