Pakistan’s consumer inflation accelerated to 4.1% year-on-year in July, up from 3.2% in June, according to the Pakistan Bureau of Statistics (PBS).
In July, compared to last month, this 2.9% inflation jump is the highest interest rate since December last year, reflecting the immediate impact of higher energy prices and food costs at the start of the new fiscal year 2025-26.
PBS data shows that the inflation surge was mainly caused by rising costs of non-perishable food items and official hikes in electricity, gas.
Although the government recently reduced petrol prices by over Rs 7 per liter, energy inflation is expected to rise further due to phased increases in gas tariffs and the rollback of temporary electricity subsidies.
With an official inflation target of 7.5% for the fiscal year, experts believe that the State Bank of Pakistan has no option but to consider a reduction in the rate in the upcoming months.