By Abdul Ghani

Pakistan’s inflation accelerated sharply in April 2026 as rising global oil prices and higher domestic energy costs pushed up transportation and food prices, according to the Ministry of Planning’s Monthly Development Update for May 2026.

The report showed that headline inflation climbed to 10.9 percent in April 2026 compared with just 0.3 percent in April last year. Average inflation during July-April FY2025-26 also increased to 6.2 percent from 4.7 percent in the same period a year earlier.

According to the report, the inflationary surge was triggered mainly by higher international oil prices linked to the ongoing conflict in the Middle East.

Dubai crude reportedly climbed to nearly $170 per barrel in March 2026, increasing domestic fuel prices, transport costs and broader energy-related inflationary pressures.

The report noted that increases in housing and utility costs, alongside rising transport and services prices, contributed to the broader rise in consumer inflation.

Higher fuel costs also intensified pressure on food prices through increased transportation and logistics expenses.

The Sensitive Price Indicator (SPI), which tracks short-term movements in essential commodity prices, rose from 0.37 percent in early March to 3.07 percent by April 3, 2026.

In response, the government intensified weekly meetings of the National Price Monitoring Committee (NPMC) to coordinate anti-inflation measures with provincial administrations and market authorities.

The report stated that the government strengthened market surveillance, improved inter-provincial supply coordination and increased enforcement against profiteering, hoarding and unjustified price increases in essential commodities.

The intervention contributed to a gradual easing in weekly inflation indicators later in April.

SPI declined by 0.69 percent and 0.33 percent during the weeks ending April 16 and April 23, respectively.

Several food items also recorded price corrections during the month.

Onion prices declined from Rs 81 per kilogram to Rs 67.7 per kilogram, chicken prices fell from Rs 459 per dozen to Rs 402 per dozen, while garlic prices dropped from Rs 495.6 per kilogram to Rs 450.6 per kilogram.

The report indicated that inflation management remained one of the government’s key economic challenges amid rising external-sector pressures and volatile global commodity markets.

Imports of goods and services increased 8.3 percent to $56.3 billion during July-March FY2025-26, partly because of a higher energy import bill.

At the same time, the current account surplus narrowed sharply to just $0.008 billion during July-March FY2025-26 compared with $1.67 billion a year earlier.

Despite inflationary pressures, the report stated that Pakistan’s broader economic stabilization momentum largely continued during the fiscal year.

Large-scale manufacturing grew 6.5 percent during July-March FY2025-26, while remittances increased 8.5 percent to $33.9 billion.

The development outlook noted that maintaining fiscal discipline, improving implementation capacity and managing external risks would remain critical for controlling inflation and sustaining macroeconomic stability in the coming months.

Credit: INP-WealthPk