Pakistan Inflation 2026 Surge Hits 7% Amid Power Tariff Shock

The Pakistan Inflation 2026 Surge pushed the rate to 7% in February. This marks the highest level since October 2024. As a result, many households now face higher monthly expenses. The Pakistan Bureau of Statistics reported that the Consumer Price Index rose 6.98% year on year. In January, inflation stood at 5.8%. A year ago, it was only 1.5%.

Electricity Prices Drive Costs Higher

Electricity tariffs caused the biggest impact. The government removed cross subsidies and added fixed charges. Therefore, power bills increased sharply for many families. The housing and utilities group rose 9.65% over the year. Electricity alone jumped 10.03% compared to January. Consequently, people across cities and rural areas felt the pressure. Food prices also increased. Food and non-alcoholic beverages rose 5.8% in February. In addition, housing and utilities climbed faster than last month.

Core Inflation and Interest Rates

Core inflation showed mixed signals. Urban core inflation eased slightly to 7.1%. Rural core inflation remained steady at 8.3%. Meanwhile, the State Bank of Pakistan kept its policy rate unchanged at 10.5%. However, rising inflation reduced real interest rates by 120 basis points. Policymakers chose caution despite calls for a rate cut.
The Wholesale Price Index rose to 1.0% in February. Previously, it stood at 0.2%. This increase suggests producers face higher costs. Usually, wholesale prices affect retail prices later. As a result, consumers may see further increases in coming months.

Food and Non Food Price Trends

Some food items saw sharp rises. Tomato prices surged 82%. Wheat increased 42.6%, while wheat flour rose 25.9%. However, not all prices climbed. Potato prices fell 40%. Chicken dropped 21.8%, and gram pulse declined 21.7%. In the non food segment, gas charges jumped 22.9%. Postal services and newspapers also recorded notable increases. Education costs rose 8.78%, adding to household stress.