Pakistan’s headline inflation reached 7% year-on-year (YoY) in February 2026, according to data released by the Pakistan Bureau of Statistics (PBS) on Monday. The figure aligns with the Ministry of Finance’s projection of 6–7%.
The Consumer Price Index (CPI) had stood at 5.8% in January 2026 and 1.5% in February 2025.
On a month-on-month (MoM) basis, CPI rose by 0.3% in February 2026, compared with a 0.4% increase in January and a 0.8% decline in February 2025.
As a result, inflation for the first eight months of FY26 (8MFY26) averaged 5.46%, slightly lower than 5.85% recorded during the same period of FY25.
Urban and Rural Breakdown
Urban CPI inflation climbed 6.8% YoY in February 2026, compared with 5.8% in January and 1.8% in February 2025. On a monthly basis, urban inflation increased 0.3%, against 0.2% in the previous month and a 0.7% decline a year earlier.
Rural CPI inflation rose 7.3% YoY in February 2026, up from 5.8% in January and 1.1% in February 2025. On an MoM basis, rural inflation increased 0.3%, compared with 0.6% in January and a 1.1% decrease in February last year.
Outlook and Policy Response
In its Monthly Economic Update & Outlook for February 2026, the Finance Division had projected inflation within the 6–7% range.
Earlier, brokerage firm Optimus Capital Management anticipated inflation to edge up to 7.4% YoY, citing pressures from rising electricity and gold prices.
Last month, the State Bank of Pakistan (SBP) kept its benchmark policy rate unchanged at 10.5% during its first Monetary Policy Committee (MPC) meeting of 2026 — a move that diverged from market expectations of a rate cut.
SBP Governor Jameel Ahmad announced the decision at a press conference, cautioning that inflation could remain above 7% in the second half of the current fiscal year.
