The latest figures from the Pakistan Bureau of Statistics (PBS) reveal a significant uptick in the country’s inflation rate, with the Consumer Price Index (CPI)-based inflation reaching 7% year-on-year (YoY) in February 2026. This marks a noticeable increase from the 5.8% inflation recorded in January 2026 and a sharp rise compared to just 1.5% in the same month last year. The steady climb in inflation reflects ongoing economic pressures affecting both urban and rural areas across Pakistan.
Breaking down the numbers further, urban inflation also experienced a marked increase. The urban CPI inflation rate rose to 6.8% YoY in February, up from 5.8% in January 2026 and 1.8% in February 2025. On a month-on-month (MoM) basis, the urban inflation rate inched up by 0.3% in February, slightly higher than the 0.2% recorded in January. This contrasts with a 0.7% decline in urban prices during February of the previous year, indicating a reversal in the trend and highlighting the growing cost of living in cities.
Meanwhile, rural areas have not been spared from inflationary pressures. The rural CPI inflation rate climbed to 7.3% YoY in February 2026, rising from 5.8% in January and significantly higher than the 1.1% recorded in February 2025. Month-on-month, rural inflation increased by 0.3% in February, following a 0.6% rise in January. This is a stark contrast to the 1.1% decrease observed in rural prices during the same month last year. These figures suggest that residents in rural Pakistan are facing increasing challenges as prices for essential goods and services continue to escalate.
In addition to the CPI, the Sensitive Price Indicator (SPI), which tracks the prices of essential commodities, also saw a rise. The SPI recorded a 4.8% YoY increase in February 2026, compared to 3.3% in January and a slight decline of 0.2% in February 2025. However, on a monthly basis, the SPI saw a marginal decrease of 0.1% in February, following a 0.8% drop in January and a 1.6% fall in February last year. This mixed movement in SPI suggests some volatility in the prices of key consumer items, which directly impact household budgets.
Turning to the Wholesale Price Index (WPI), which measures price changes at the wholesale level, the index rose by 1.0% YoY in February 2026. This is a notable increase from the 0.2% rise seen in January and reverses the 0.7% decline recorded in February 2025. On a month-on-month basis, the WPI increased by 0.7% in February, bouncing back from a 0.2% decrease in January. The upward movement in wholesale prices often signals potential future increases in retail prices, adding further pressure on consumers.
Core inflation, which excludes volatile food and energy prices to provide a clearer picture of underlying inflation trends, showed mixed results between urban and rural areas. In urban centers, core inflation measured by non-food, non-energy (NFNE) items rose by 7.1% YoY in February 2026, a slight dip from 7.2% in January and lower than 7.8% in February 2025. Month-on-month, urban core inflation edged up by 0.2%, down from a 1.0% increase in the previous month. Conversely, rural core inflation remained steady at 8.3% YoY in February, unchanged from January but significantly lower than the 10.4% recorded in February 2025. On a monthly basis, rural core inflation increased by 0.4% in February, compared to a 1.1% rise in January and matching the 0.4% increase seen in February last year.
These inflation trends highlight the complex economic challenges facing Pakistan, as rising prices affect both urban and rural populations differently. The increase in wholesale prices and the sensitive price index further underscore the pressures on supply chains and consumer affordability. As inflation continues to rise, policymakers and economic stakeholders will need to carefully monitor these developments to mitigate the impact on vulnerable communities and stabilize the economy.
