Inflation hits 10.9% in Pakistan, highest level in nearly two years

Pakistan’s inflation rate surged to 10.9% in April, reaching its highest level in nearly two years, according to the Pakistan Bureau of Statistics (PBS). The increase has been driven by global supply shocks, higher fuel prices, and the government’s decision to fully pass on rising petroleum costs to consumers, along with an increase in petroleum levy.

The report shows that inflation has once again entered double digits for the first time since July 2024. Analysts say the situation worsened after the government, under the IMF program, increased taxes and allowed fuel price adjustments to be directly reflected in domestic markets.

Fuel prices recorded a sharp rise, with motor fuels becoming 40% more expensive compared to the same period last year, despite having a relatively small weight in the CPI basket. Diesel prices saw an even steeper increase of around 93%, heavily impacting transportation and goods movement across the country.

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Electricity prices were also 33% higher year-on-year, while liquefied petroleum products rose by 63%, adding further pressure on household budgets.

Food inflation also accelerated, with tomatoes rising by 75%, onions by 42%, and wheat prices increasing by nearly 40%. Wheat flour prices climbed more than 30%, reflecting widespread pressure on essential commodities.

Transport services became 38% more expensive due to rising fuel costs, pushing the overall transport inflation rate to 30%. Meanwhile, housing, water, electricity, and gas-related costs increased by 17% compared to last year.

The State Bank of Pakistan is attempting to control inflation through high interest rates, although government-led price increases and global energy shocks continue to drive inflation upward.

The IMF has also urged Pakistan to expand cash support under the Benazir Income Support Programme (BISP) to protect vulnerable households from rising prices.

Experts warn that continued fuel price hikes could keep inflation elevated in the coming months.