Finance & Digital Economy | July 2026 | 4 min read
⚡ Quick Takeaways
- Average CPI inflation stood at 7.05 percent in FY26, up from 4.49 percent last year.
- June headline inflation was 11.1 percent year-on-year, slightly below May’s 11.7 percent.
- Consumer prices fell 0.3 percent month-on-month after rising 0.5 percent in May.
- Urban and rural inflation both stayed near 11 percent on a year-on-year basis.
- Core inflation eased slightly but remained high, showing continued pressure beyond volatile items.
Pakistan closed FY26 with a higher average inflation rate than last year, even though headline prices eased slightly in June on a monthly basis.
| 7.05% Average CPI inflation in FY26 |
11.1% June CPI year-on-year |
-0.3% June CPI month-on-month |
FY26 Inflation Ends Above Last Year’s Level
Pakistan’s inflation accelerated over the full fiscal year despite a softer monthly reading in June. According to Pakistan Bureau of Statistics data reported by local media, average Consumer Price Index inflation stood at 7.05 percent in FY26, compared with 4.49 percent in the previous fiscal year.
The increase means the country ended the year with a heavier price burden than last year, even after the sharp inflation spike of earlier years had cooled. For households, the headline number matters because it reflects the average pace at which everyday prices changed across the fiscal year, not just one month.
| Context: The annual average rose from last year, but it remained far below the very high inflation levels Pakistan faced in earlier years. |
June CPI Eases From May but Remains in Double Digits
Headline CPI inflation stood at 11.1 percent on a year-on-year basis in June 2026. This was lower than 11.7 percent recorded in May, but much higher than 3.2 percent in June 2025. The comparison shows that price growth slowed slightly from the previous month but remained far above last year’s level.
On a month-on-month basis, consumer prices declined 0.3 percent in June after increasing 0.5 percent in May. This monthly decline offered some short-term relief, but it did not change the wider picture of double-digit annual inflation. The gap between monthly easing and annual pressure is important for readers because prices can fall in one month while still being much higher than a year earlier.
Urban CPI inflation increased 11.2 percent year-on-year in June, easing from 11.8 percent in May but still far above the 3.0 percent recorded in June last year. Urban prices fell 0.5 percent on a monthly basis after rising 0.7 percent in May.
| Inflation Measure | June 2026 | May 2026 | Reading |
| Average CPI, FY26 | 7.05% | FY25: 4.49% | Higher than last fiscal year |
| Headline CPI YoY | 11.1% | 11.7% | Lower than May, still high |
| Headline CPI MoM | -0.3% | 0.5% | Monthly price decline |
| Urban CPI YoY | 11.2% | 11.8% | Slight easing |
| Rural CPI YoY | 10.9% | 11.5% | Slight easing |
| WPI YoY | 10.7% | 12.7% | Wholesale inflation slowed |
Rural Prices Stay High as Wholesale Inflation Slows
Rural CPI inflation reached 10.9 percent year-on-year in June, down from 11.5 percent in May but well above the 3.6 percent recorded in June 2025. On a monthly basis, rural prices remained unchanged after increasing 0.3 percent in May. This suggests that rural consumers saw limited fresh monthly pressure in June, even though prices were still much higher than a year earlier.
The Sensitive Price Indicator, which tracks short-term movements in essential items, increased 12.8 percent year-on-year in June, compared with 12.0 percent in May. On a monthly basis, SPI remained unchanged at 0.7 percent. This shows that essential commodity prices continued to remain a concern for households watching weekly grocery and utility costs.
Wholesale Price Index inflation slowed to 10.7 percent year-on-year from 12.7 percent in May. However, it was still much higher than the 0.6 percent recorded in June last year. Wholesale prices fell 1.2 percent on a monthly basis after declining 0.8 percent in May, which may help reduce some pipeline pressure if the trend continues.
| Price Watch: Lower monthly readings are helpful, but households will feel real relief only when annual inflation and essential-item prices cool more clearly. |
Core Inflation Shows Pressure Beyond Volatile Items
Core inflation also remained elevated despite easing marginally. Non-food, non-energy inflation stood at 8.7 percent year-on-year in urban areas, compared with 9.0 percent in May. Rural core inflation eased to 7.9 percent from 8.4 percent. These measures exclude food and energy, so they are watched closely for underlying price pressure.
Trimmed mean core inflation, which removes extreme price movements, stood at 9.6 percent in urban areas and 9.3 percent in rural areas. Both readings were slightly lower than the previous month but substantially higher than the corresponding readings in June 2025. This means inflation pressure is not limited only to a few volatile categories.
For policymakers, the June data presents a mixed picture. Monthly CPI declined and several annual readings eased from May, but average FY26 inflation rose from last year and core measures stayed elevated. That keeps attention on food prices, energy costs, transport, wage pressures and the speed at which lower monthly inflation can translate into broader relief.
| Bottom Line: Pakistan ended FY26 with higher average inflation than last year, even as June showed some short-term cooling from May. |
Disclaimer: This article is based on PBS inflation data reported by verified media sources at the time of writing. Inflation readings may be revised or updated in later official releases.
