Pakistan’s headline Inflation rose to 5.8 percent on a year-on-year basis in January 2026, according to official figures released on Monday. The data was shared by the Pakistan Bureau of Statistics (PBS).
The latest reading was broadly in line with the Ministry of Finance forecast. The ministry had projected Inflation to remain between 5 and 6 percent for January. The figure shows a slight increase compared to 5.6 percent recorded in December 2025. However, it remains much higher than the 2.4 percent level seen in January last year.
On a month-on-month basis, Inflation increased by 0.4 percent in January. This reversed a 0.4 percent decline recorded in December. The pace was the same as that seen in January 2025, indicating renewed price pressures at the start of the year.
PBS data also showed some improvement in average figures. Inflation during the first seven months of the fiscal year, from July 2025 to January 2026, averaged 5.24 percent. This compares with 6.50 percent during the same period last year. The decline suggests some easing in overall price trends despite recent monthly increases.
Urban areas continued to face steady price pressures. Annual urban inflation stood at 5.8 percent in January, unchanged from December. On a monthly basis, urban prices increased by 0.2 percent. In comparison, urban inflation was 2.7 percent in January 2025.
Rural areas saw a sharper rise. Annual rural inflation climbed to 5.8 percent in January from 5.4 percent in December. Month-on-month prices rose by 0.6 percent after falling by the same margin in the previous month. Rural inflation was much lower at 1.9 percent in January last year.
The Finance Division, in its January 2026 Monthly Economic Update and Outlook, maintained its projection of inflation staying within the 5 to 6 percent range in the near term.
Meanwhile, the State Bank of Pakistan (SBP) kept its benchmark policy rate unchanged at 10.5 percent last week. This decision came during the first Monetary Policy Committee meeting of the year. Markets had expected a possible rate cut.
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SBP Governor Jameel Ahmad warned that inflation could rise above 7 percent in the second half of the fiscal year. He also projected economic growth between 3.75 and 4.75 percent for the current year.
