By Staff Reporter
ISLAMABAD: Pakistan’s headline inflation quickened to 10.9% year-on-year in April, the Pakistan Bureau of Statistics reported on Friday, topping the government’s projection and highlighting the stubborn price pressures that prompted the central bank to raise interest rates for the first time in three years.
The reading compared with 7.3% in March and just 0.3% in April 2025. On a month-on-month basis, the consumer price index rose 2.5%, accelerating from a 1.2% gain the previous month and reversing a 0.8% decline a year earlier. Urban inflation climbed 11.1% from a year earlier, up from 7.4% in March and 0.5% in April 2025. Rural prices gained 10.6%, compared with 7.2% and minus 0.1%, respectively.
Month-on-month, urban CPI advanced 2.7%, while rural prices rose 2.1%. That followed respective gains of 1.3% and 1% in March and declines of 0.7% and 1% a year ago. For the first 10 months of the fiscal year, inflation averaged 6.19%, up from 4.73% in the same period a year earlier.
The Finance Division had projected single-digit inflation of 8% to 9% for April as recently as its Monthly Economic Update & Outlook for April, published on Thursday. It attributed the expected moderation to a range of factors, including supply-chain constraints linked to geopolitical tensions in the Middle East. “Amid ongoing supply chain constraints [due to geopolitical tension in Middle East], inflation is anticipated to remain within the range of 8-9% for April 2026,” the ministry said in the report.
The actual outcome also exceeded market expectations. A pre-release forecast from Muhammad Shahroz, head of research at Insight Securities, who had penciled in headline inflation of 10.1%. In a note circulated ahead of the data, he cited a low base effect combined with elevated food and housing indices. On a monthly basis, he had expected a 1.7% rise, driven primarily by higher retail fuel prices and elevated liquefied petroleum gas costs.
The sharper-than-anticipated pickup in prices aligns with the State Bank of Pakistan’s decision this week to increase its key policy rate by 100 basis points to 11.5%. It marked the first hike in three years as the central bank moves to anchor inflation expectations.
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