Pakistan's inflation is projected to stay within the 8-9 percent range for April 2026, driven by supply chain disruptions caused by the ongoing Iran war, according to the Finance Division. The announcement came on Thursday, highlighting that key macroeconomic indicators have remained relatively stable despite external pressures.
Inflation Trends and Fuel Prices
The Consumer Price Index (CPI) inflation in Pakistan rose to 7.3 percent year-on-year in March, up from 7 percent in February, as reported by the statistics bureau on April 1. Fuel prices have surged in many countries since February, particularly in Pakistan, amplifying cost pressures across the economy. This spike is linked to escalating tensions involving Iran, the United States, and Israel, which have disrupted global energy markets and pushed crude oil prices above $100 per barrel.
Finance Division's Outlook
“Amid ongoing supply chain constraints, inflation is anticipated to remain within the range of 8.0-9.0 percent for April 2026,” the Finance Division stated in its monthly economic outlook report. The report acknowledged that the Iran conflict introduces new risks and heightened uncertainty, but noted that Pakistan’s economy appears “relatively better positioned” than during previous episodes of external stress.
Positive Economic Indicators
The report highlighted several positive developments: the manufacturing sector continued to grow, and the external sector recorded three consecutive monthly current account surpluses, driven by strong remittances and rising IT exports. Additionally, Pakistan’s timely payment of $1.4 billion in Eurobonds, a successful staff-level agreement with the International Monetary Fund, and Fitch agency’s B- rating for Pakistan have further reinforced the country’s external credibility.
These factors suggest that while inflation remains a concern, Pakistan’s economic fundamentals are showing resilience amidst global uncertainties.
