Consumer Price Index inflation in Pakistan measured 5.8 percent on a year-on-year basis in January 2026, reflecting a slight uptick from 5.6 percent recorded in December 2025 and a notable increase from 2.4 percent observed in January 2025. The latest reading indicates moderate inflationary pressure compared to last year’s low base, while still remaining below the average levels seen during the previous fiscal cycle.
On a cumulative basis, inflation during July to January FY2026 averaged 5.2 percent, compared to 6.5 percent in the corresponding period of last fiscal year. The decline in the seven-month average suggests that overall price momentum has moderated relative to FY2025, even though certain expenditure categories continue to exert upward pressure on household budgets.
A breakdown of year-on-year contributors highlights education as the largest driver, recording an increase of 10.1 percent. Health-related expenses followed with a 7.1 percent rise, underscoring sustained cost pressures in essential services. Non-perishable food items registered a 7.6 percent increase, reflecting continued adjustments in staple goods and packaged consumables.
Housing, water, electricity, gas and fuels collectively posted a 7.3 percent increase, maintaining their position among the most influential inflation components. Clothing and footwear recorded a 6.1 percent rise, while restaurants and hotels experienced a 4.9 percent increase compared to January last year. Transport costs rose by 2.6 percent, indicating relatively contained movement in fuel-linked and commuting expenses.
Other segments also contributed to the inflation basket, including alcoholic beverages and tobacco, which increased by 3.7 percent, and furnishing and household equipment maintenance, which rose by 3.2 percent. Communication costs registered a marginal 0.6 percent increase, reflecting relative stability in telecom and related service charges.
In contrast to the upward movement across several core categories, certain components showed notable declines. Perishable food prices dropped sharply by 19.7 percent on a year-on-year basis, offering relief in fresh produce markets. Recreation and culture also recorded a decline of 4.4 percent, contributing to a partial offset of broader price increases across essential goods and services.
Short-term price movements indicate some easing in weekly trends. The Sensitive Price Indicator declined by 0.54 percent for the week ended February 26, 2026. Out of 51 monitored items, prices of 13 items increased during the week, 14 items decreased, and 24 items remained unchanged. The mixed weekly movement signals relative balance in essential commodity pricing, with declines marginally outweighing increases.
The overall inflation landscape for January 2026 presents a nuanced picture. While headline CPI has edged up compared to the previous month and significantly higher than the same month last year, the average inflation for the fiscal year to date remains below last year’s level. Core service segments such as education, health, and housing continue to drive inflationary pressure, whereas perishable food prices have provided temporary relief.
As Pakistan moves further into FY2026, the trajectory of inflation will remain closely tied to domestic supply conditions, administrative pricing decisions, and global commodity trends. For now, January’s data reflects moderate but persistent price adjustments across key consumption categories, balanced by selective declines in food and discretionary segments.
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