Consumer inflation rate eases slightly to 11.1pc in June due to lower energy, food prices: PBS

Pakistan's consumer inflation eased marginally to 11.1% in June, a slight dip from 11.7% the previous month, according to data released by the Pakistan Bureau of Statistics. This modest reduction was primarily attributed to decreased prices for energy and essential food items, offering some relief to households.

However, the full impact of declining international oil prices has yet to be realized by domestic consumers, limiting the overall reduction in inflationary pressures. On a monthly basis, inflation saw a 0.3% decrease. The year-on-year inflation rate between July 2025 and June 2026 stood at 7.05%, a significant increase from 4.49% in the corresponding period last year, despite a high base effect. The government has adjusted its inflation targets, projecting 7.5% for the current fiscal year and 8.2% for FY27.

Energy prices experienced a notable drop in June, but their effect on overall inflation was constrained by the ongoing blockage of the Strait of Hormuz, a critical route for Pakistan's energy imports. Transport costs saw a substantial decrease of 7.22% month-on-month. Conversely, non-perishable food items recorded a sharp increase of 10.21%, indicating persistent volatility in essential commodities. Housing, water, electricity, gas, and fuels also contributed to household budget pressures with a 15.5% increase.

The State Bank of Pakistan had previously raised its policy rate to 11.5% in April to combat rising inflation. The latest data indicates urban inflation at 11.2%, slightly higher than the 10.9% in rural areas. Food inflation increased month-on-month in both urban and rural areas, while non-food inflation remained high, reaching 13.1% in urban and 12.3% in rural regions. Core inflation, excluding food and energy, stood at 8.7% in urban areas and 7.9% in rural areas.