Pakistan’s Consumer Price Index (CPI) for May 2026 is expected to rise to 11.0–11.5% year-on-year, compared to 10.89% in April 2026 and 3.46% in May 2025. This would be the highest inflation reading in the last 23 months.
On a month-on-month basis, inflation is projected at 0.07%, mainly driven by a 1.2% increase in food prices.
Food inflation is expected to rise due to higher prices of essential items, including wheat flour (up 9.47%), wheat (up 5.52%), and potatoes (up 5.24%). However, this increase is partly offset by lower prices of tomatoes (down around 28%) and onions (down nearly 13%).
In the transport sector, prices declined slightly, even after earlier pressure from global oil markets. Petrol prices increased by 5.6%, while high-speed diesel saw a sharp drop of 23.1%.
The housing, water, electricity, and gas category is expected to fall by 0.79% month-on-month, mainly due to lower LPG prices and reduced electricity charges. Electricity costs declined because of a negative fuel charge adjustment and a quarterly tariff adjustment.
With inflation expected in the 11.0–11.5% range, real interest rates are projected to remain around 0–50 basis points, below Pakistan’s historical average.
According to Topline Research, average inflation is forecast at 7.1% for FY2026, while FY2027 inflation is expected to rise to 8.2%.
