By Staff Reporter
ISLAMABAD: Pakistan’s headline inflation accelerated to the fastest pace in four months in February, climbing to 7 percent year-on-year as higher electricity charges and fresh-produce prices offset declines in chicken and eggs, data from the Pakistan Bureau of Statistics showed on Monday.
The consumer-price index rose 7 percent from a year earlier, the statistics bureau said, matching the Finance Ministry’s forecast range of 6 percent to 7 percent and the highest reading since October 2024. That compared with a 5.8 percent gain in January and 1.5 percent in February 2025. On a month-on-month basis, the CPI increased 0.3 percent, easing from a 0.4 percent rise the previous month. The pickup took eight-month fiscal-year inflation to 5.46 percent, down from 5.85 percent a year earlier.
The reading comes as investors grapple with fresh volatility in global commodity markets following US and Israel strikes in Iran. Urban inflation rose 6.8 percent year-on-year, accelerating from 5.8 percent in January, while rural prices climbed 7.3 percent from 5.8 percent. Both categories posted identical 0.3 percent month-on-month gains. The national CPI advanced 0.27 percent from January and 6.98 percent from February 2025, the bureau’s detailed price indices showed. Urban CPI gained 0.27 percent month-on-month and 6.79 percent year-on-year; rural CPI rose 0.28 percent and 7.27 percent respectively.
Electricity charges jumped 10.03 percent month-on-month and were among the biggest non-food drivers, alongside cleaning and laundering (up 2.09 percent), tailoring (2.04 percent) and solid fuel (1.71 percent). In food, tomatoes surged 23.05 percent, fresh fruits 11.48 percent and pulse mash 8.19 percent. Offsetting declines came from eggs (down 22.39 percent), chicken (19.99 percent) and potatoes (15.89 percent).
The wholesale-price index rose 0.66 percent from January and 1.05 percent from a year earlier. The sensitive-price indicator, which tracks essentials, eased 0.12 percent month-on-month across income groups but remained 4.60 percent higher year-on-year.
The pickup had been broadly anticipated. Optimus Capital Management had flagged 7.4 percent as a likely outcome, citing electricity and gold-price pressures. Analysts at Topline Securities said the print fell within their 6.75 percent-7.25 percent estimate, while Arif Habib Ltd. noted it marked the highest increase since October 2024.
The State Bank of Pakistan left its benchmark policy rate unchanged at 10.5 percent last month in its first Monetary Policy Committee meeting of 2026, surprising traders who had priced in a cut. Governor Jameel Ahmad said at the time that inflation could exceed 7 percent in the second half of the fiscal year. The central bank has warned that prices may overshoot its medium-term 5 percent-7 percent target range for several months even as economic growth gathers pace and imports widen the trade deficit.
The International Monetary Fund, overseeing Pakistan’s $7 billion Extended Fund Facility, has cautioned against premature easing and urged authorities to stay data-dependent to anchor expectations and rebuild external buffers. An IMF mission began talks in Islamabad on the third review of the EFF and the second review of the Resilience and Sustainability Facility.
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