Inflation for April spiked to its highest level in 21 months, reaching 10.9% year-on-year, primarily due to rising prices of essential commodities and higher rates of transport resulting from the fuel supply disruptions caused by the Iran war.
April marked the first month since July 2024 that inflation has risen to double digits. However, on a month-on-month basis, prices increased by 2.48% over March 2026.
According to the Pakistan Bureau of Statistics (PBS), inflationary pressures soared in both rural (10.5%) and urban (11.1%) areas, with almost all hikes attributable to recent increases in the prices of petroleum products, which the government blames on the Middle East conflict. A key reason for the surge, however, is the hefty taxes imposed on fuel products, which the government claims it cannot waive under commitments to the International Monetary Fund (IMF).
Earlier this week, the State Bank of Pakistan (SBP) sought to dampen inflation, increasing the interest rate by 1% to 11.5%, drawing backlash from industrialists.
In its update, the PBS said the prices of motor fuels had spiked by 40% year-on-year. The price of diesel, which has seen the highest jump, was 93% higher in April 2026 compared to the same period last year. At the same time, electricity prices have risen 33% year-on-year, while the rate for LPG—a key fuel for cooking—has seen a jump of 63%.
The PBS report states food inflation in urban areas increased by 6.9% in April and 7.3% in rural areas. Similarly, energy prices increased by 13.8% in urban areas and 13.6% in rural settings. The non-food segment of the Consumer Price Index also saw an 8% hike in urban areas and an 8.5% boost in rural areas.
The key driver of food inflation, per the PBS report, appears to be higher transportation costs resulting from the fuel price surge. It said tomatoes had seen a 75% price surge year-on-year; onions 42%; and almost 40% for wheat.