Pakistan’s inflation is expected to rise further in May 2026, according to latest estimates. Analysts project the Consumer Price Index (CPI) to remain between 11.0 and 11.5 percent year on year.
This would be higher than April 2026, when inflation stood at 10.89 percent. It is also much higher compared to May 2025, which recorded 3.46 percent. If confirmed, it will be the highest reading in 23 months.
On a monthly basis, Pakistan’s inflation is expected to increase slightly by 0.07 percent. This rise is mainly driven by higher food prices across key essential items.
Food inflation is showing an upward trend in Pakistan’s market. Prices of wheat flour have increased by 9.47 percent month on month. Wheat has risen by 5.52 percent, while potatoes have gone up by 5.24 percent.
However, some relief was seen in other vegetables. Tomato prices dropped by around 28 percent. Onion prices also fell by nearly 13 percent during the same period.
The transport sector showed mixed movement in Pakistan’s economy. Prices declined slightly after earlier increases in global oil markets. Petrol prices rose by 5.6 percent in this segment.
At the same time, High Speed Diesel recorded a sharp decline of 23.1 percent. This helped balance overall transport-related inflation in Pakistan’s economy.
The housing and utility category is expected to show a slight monthly decline of 0.79 percent. This is mainly due to lower LPG prices and reduced electricity charges.
Electricity costs fell due to a negative fuel adjustment of Rs. 0.0102 per kilowatt hour. This is significantly lower than the previous month’s adjustment of Rs. 1.6406 per kilowatt hour.
A quarterly tariff adjustment of Rs. 0.3504 per kilowatt hour also contributed to lower electricity charges in Pakistan’s CPI basket.
Despite these small reductions, overall inflation remains elevated. Real interest rates are expected to stay between 0 and 50 basis points, below historical averages.
Experts estimate that Pakistan’s average inflation for FY2026 will be around 7.1 percent. For FY2027, inflation is projected to rise slightly to 8.2 percent.
In other related news also read IMF Projects Inflation Rise in Pakistan
Economists say food and energy prices will continue to play a key role in shaping Pakistan’s inflation trend in the coming months.
