Data from Arif Habib Limited (AHL) reveals that Pakistan inflation surged to its highest level in 19 months during March 2026. The Consumer Price Index (CPI) rose by 7.3 percent year-on-year, a notable jump from the 7.0 percent recorded in February. This acceleration reflects a significant shift compared to the 0.7 percent inflation rate seen in March 2025. On a month-on-month basis, the CPI increased by 1.2 percent. These figures indicate that both consumer and wholesale prices are accelerating across the country, creating new challenges for the national economy.
Urban areas experienced a sharper rise in living costs than rural regions this month. Urban CPI inflation climbed to 7.4 percent year-on-year, up from 6.8 percent in the previous month. Meanwhile, rural CPI recorded a 7.2 percent increase. While rural inflation stayed slightly below February’s levels, the monthly growth of 1.0 percent suggests upward pressure remains. This trend in Pakistan inflation is largely driven by a spike in the Wholesale Price Index (WPI), which showed a massive 5.9 percent month-on-month increase.
Core Inflation and Wholesale Price Trends
Core inflation, which excludes volatile food and energy prices, also showed an upward trend in March. Urban core inflation rose to 7.4 percent, while rural core inflation reached 8.4 percent. These steady increases suggest that inflationary pressures are becoming more embedded in the broader economy. Additionally, the Sensitive Price Index (SPI) increased by 5.6 percent year-on-year. This index tracks the prices of essential kitchen items, directly impacting the daily lives of low-income households.
The Wholesale Price Index (WPI) provided the most dramatic data point this month with a 6.7 percent year-on-year increase. This is a significant jump from the 1.0 percent recorded just one month ago. Economic analysts note that trimmed mean core inflation, which filters out extreme price movements, also rose in both urban and rural sectors. As the fiscal year continues, these rising costs are expected to influence future monetary policy decisions. For now, consumers and businesses must navigate a landscape of rapidly changing prices and diminishing purchasing power.
