Key Takeaways
- Pakistan's headline inflation reached 9.2% year-on-year (YoY) in July 2026.
- Urban and rural CPI inflation increased by 8.7% and 9.9% YoY respectively.
- The State Bank of Pakistan expects a decline to the upper band of its target range.
Pakistan’s headline inflation rate reached 9.2% year-on-year (YoY) in July 2026, according to data released by the Pakistan Bureau of Statistics (PBS).
The consumer price index (CPI) showed a significant increase from June's figure of 11.1%, and compared to July 2025 when it was recorded at 4.1%.
Urban CPI inflation increased by 8.7% YoY, while rural CPI inflation rose by 9.9% in the same period, reflecting a broader impact on different segments of the economy.
On a month-on-month basis, urban CPI saw an increase of 1.2%, compared to a decrease of 0.3% in June and an increase of 2.9% in July 2025.
Rural CPI also increased by 1.2% on a monthly basis, marking a change from no change observed in the previous month and an increase of 2.2% in July 2025.
The Finance Division has projected CPI at 9-10% for July 2026, citing rising global oil prices as one of the key factors contributing to inflationary pressures.
Pakistan’s economy faced a significant decline in foreign direct investment (FDI), dropping from $2.48 billion in 2024-25 to $1.64 billion in the last fiscal year, adding another layer of economic uncertainty.
In its first meeting for the fiscal year 2026-27, the State Bank of Pakistan (SBP) Monetary Policy Committee decided to keep the policy rate unchanged at 11.5%.
SBP Governor Jameel Ahmad expressed cautious optimism, stating that CPI inflation is expected to decline and reach the upper band of their target range by the end of this fiscal year.
We expect the CPI to clock in at the upper band of our target range of 5-7% by the end of this fiscal year.
Jameel Ahmad, SBP Governor
