Riaz Hussain :
Pakistan is bracing for a fresh wave of inflation and tighter monetary policy after a record increase in petroleum prices, with analysts warning that Consumer Price Index (CPI) inflation could exceed 15% in the coming months.
The surge follows a steep hike in petrol and diesel prices as the government struggled to sustain large subsidies.
According to recent data, CPI-based inflation rose to 7.3% year-on-year in March 2026, up from 7% in February and significantly higher than 0.7% recorded in March last year.
Weekly inflation, measured by the Sensitive Price Index (SPI), also edged up by 1.01% for the week ending April 2. The increase was largely driven by a sharp rise in Liquefied Petroleum Gas (LPG) prices, which surged by 13.28%, along with notable increases in eggs and chicken prices.
Economic experts warn that inflationary pressures are set to intensify further.
Adnan Khan chartered accountant told CBN inflation to rise to around 13 to 14 % in April and cross 15% during May and June. He predicts 1–2% increase in interest rates in the upcoming monetary policy review as the central bank attempts to curb rising inflation.
Last month, the central bank kept its benchmark policy rate unchanged at 10.5%, in line with market expectations amid rising global energy prices linked to geopolitical tensions in the Middle East.
Currency pressures are expected to mount as well, with projections suggesting a 5–7% depreciation in the rupee, potentially pushing the US dollar close to Rs290 by June. Adnan told .
Meanwhile, the energy outlook remains uncertain. Analysts warn that a potential shortfall in RLNG supplies from Qatar, coupled with transmission constraints, could result in higher electricity tariffs and intermittent load shedding, particularly in Punjab during the peak summer season.
In a major move, the government recently announced a sharp increase in fuel prices, raising petrol by 43% and diesel by 55%. However, a day later, Prime Minister Shehbaz Sharif announced a temporary relief measure, reducing the petroleum levy on petrol by Rs80 per litre for one month.
On the commodities front, SPI data shows mixed price trends. Increases were recorded in essential food items such as pulse mash, mutton, fresh milk, curd, and beef. Prices of clothing items like georgette and lawn fabric also saw slight upticks.
Conversely, prices of several vegetables and staples declined during the week, including tomatoes, garlic, potatoes, onions, wheat flour, bananas, mustard oil, firewood, and sugar.
Out of 51 monitored items, prices of 15 items increased, 9 decreased, while 27 remained stable.
On a year-on-year basis, SPI inflation rose by 9.12%, driven primarily by significant increases in LPG, diesel, gas charges, petrol, and wheat flour. Prices of onions, chilli powder, mutton, beef, powdered milk, and rice also contributed to the upward trend.
However, some relief was observed in items such as potatoes, pulse gram, chicken, salt, sugar, pulse masoor, garlic, and eggs, which recorded notable declines compared to last year.
With rising fuel costs feeding into transportation and production expenses, economists warn that inflationary pressures could persist, posing continued challenges for households and policymakers alike.