Pakistan’s inflation is poised to accelerate sharply, with consumer prices likely to climb to 7–7.5% in March and potentially reach double digits by April if global oil prices remain near $100 per barrel, raising fresh risks for the country’s fragile economic recovery.
Rising fuel costs are already feeding into transport and energy prices, pushing up household expenses and increasing pressure on policymakers. The transport segment alone is expected to surge 18% month-on-month in March, driven by steep increases in petrol and diesel prices following the jump in international crude markets.
The projections were outlined in a new analysis by brokerage house Topline Securities, which warned that sustained oil prices could significantly reshape Pakistan’s inflation trajectory in the coming quarters.
According to the report, if Brent crude holds around $100 per barrel, Pakistan’s average inflation could rise to 10.9% in the fourth quarter of FY2026, before moderating to 9.3%, 7.5% and 8.2% in the following three quarters.
Higher fuel prices are expected to ripple across the economy. Petrol prices are estimated to have increased 26.7% month-on-month, while high-speed diesel climbed 25%, sharply lifting transport costs and logistics expenses.
Energy costs are also adding to inflationary pressure. Electricity tariffs are expected to rise 3.27% month-on-month due to tariff adjustments, while liquefied petroleum gas (LPG) prices may increase 5.6%, further raising household energy bills.
Food prices, however, offered a rare offset. Contrary to the usual Ramadan trend, food inflation declined 1.29% month-on-month, largely due to steep price drops in tomatoes, eggs, potatoes and wheat, though chicken and meat prices edged higher.
The report said monetary policy may remain steady for now, but warned that sustained oil prices above $120 per barrel could force the central bank to consider raising interest rates to prevent real rates from turning negative.
Pakistan’s real interest rate is expected to widen to around 300–350 basis points in March, above the country’s historical average, reflecting the gap between policy rates and rising inflation expectations.