Short-term inflation in Pakistan continued its upward trajectory for the 31st consecutive week, as the latest data for the week ending March 5, 2026, reveals a sharpening of price pressures. According to the Pakistan Bureau of Statistics (PBS), the Sensitive Price Indicator (SPI) rose by 0.37% on a week-on-week basis, primarily fueled by a historic surge in petroleum prices and volatile poultry costs.
While the year-on-year (YoY) inflation rate currently sits at a relatively moderate 4.70%—a significant cooling from the 23% levels seen in mid-2024—the weekly acceleration signals a potential reversal of the recent disinflationary trend. Analysts warn that the combination of geopolitical tensions and energy tariff adjustments could push inflation back toward double digits by the second quarter of 2026.
SPI Data Breakdown: March 5, 2026
The SPI, which monitors 51 essential commodities across 17 urban centers, provides a real-time pulse of the country’s economic health. The most recent reporting period shows a market in flux, with energy and transport costs exerting the most significant upward pressure.
| Metric | Current Value (March 5, 2026) | Trend |
|---|---|---|
| Weekly SPI Change (WoW) | +0.37% | Increasing |
| Annual SPI Change (YoY) | +4.70% | Moderate |
| Monitored Items Increased | 13 (25.49%) | Up |
| Monitored Items Decreased | 11 (21.57%) | Down |
| Monitored Items Stable | 27 (52.94%) | Neutral |
The Energy Catalyst: Petrol and LPG Surges
The primary driver of this week’s inflation jump was the energy sector. Following the government’s decision to increase fuel prices by a staggering Rs 55 per litre—the largest single hike on record—the impact was immediately felt across the supply chain.
Petrol prices rose by 3.06% weekly, while High-Speed Diesel (HSD) increased by 1.84%. These adjustments are largely attributed to the closure of the Strait of Hormuz, which has severely disrupted global oil shipments and forced Pakistan to procure energy at significantly higher benchmarks.
Furthermore, Liquefied Petroleum Gas (LPG) prices jumped by 5.61% this week. On a yearly basis, energy remains the most expensive category for Pakistani households:
- Gas Charges (Q1): Up 29.85% YoY
- Electricity Charges (Q1): Up 17.33% YoY
- LPG: Up 16.89% YoY
Read more: IMF tightens grip on Pakistan, adds 11 fresh conditions for $7 billion bailout
Food Prices: Chicken Jumps as Perishables Cool
The food basket showed a mixed performance. While some vegetable prices saw a seasonal decline, protein sources became significantly more expensive. Chicken prices surged by 10.46% in just seven days, reversing previous downward trends.
Major Weekly Price Increases:
- Chicken: 10.46%
- Bananas: 3.85%
- Garlic: 1.23%
- Beef & Mutton: ~0.66%
Conversely, some relief was noted in the produce aisle. Tomatoes saw a weekly drop of 10.04%, followed by Eggs(8.13%) and Onions (6.08%). However, these declines were insufficient to offset the massive hike in transport costs triggered by the new fuel rates.
Monetary Policy: SBP Pauses the Easing Cycle
In response to the shifting inflationary landscape, the State Bank of Pakistan (SBP) opted for a cautious approach. During its Monetary Policy Committee meeting on March 9, 2026, the central bank maintained the benchmark policy rate at 10.5%.
This decision effectively paused a period of monetary easing. The SBP cited “economic uncertainty” and the “oil-driven inflation shock” as the primary reasons for the hold. With Consumer Price Index (CPI) inflation rising to 7% in February 2026 (up from 5.8% in January), the central bank is wary of cutting rates too quickly, which could further fuel the fire of rising costs.
Strategic Outlook: The Strait of Hormuz and Q2 Forecast
The closure of the Strait of Hormuz remains the “black swan” event for Pakistan’s economy in 2026. As a net importer of energy, any prolonged disruption in the Middle East directly translates to higher shelf prices in Karachi, Lahore, and Islamabad.
Economic experts at the Ministry of Finance suggest that if oil benchmarks remain at current levels, inflation could accelerate to 9.25% in the April-June quarter. This would likely limit any future interest rate easing, keeping borrowing costs high for businesses and consumers alike.
To mitigate the impact on the most vulnerable, the government has activated District Price Control Committees and is encouraging the use of the Qeemat App to report price gouging. However, with “cost-push” inflation—driven by external energy shocks rather than domestic demand—the efficacy of local price controls remains to be seen.
As Pakistan navigates this 31st week of rising short-term inflation, the focus remains firmly on the stability of global energy routes and the government’s ability to buffer the domestic market from further external shocks.