FX.co ★ Pakistan Inflation Rate Highest in Nearly 2 Years

Pakistan’s annual inflation rate accelerated to 11.7% in May 2026 from 10.9% in April, remaining well above the State Bank of Pakistan’s target range of 5%–7% and reaching its highest level since June 2024. Price pressures strengthened across multiple categories, including food and non-alcoholic beverages (7.9% vs. 7.6%), alcoholic beverages and tobacco (2.3% vs. 2.0%), clothing and footwear (8.8% vs. 6.2%), furnishings and household equipment (5.1% vs. 3.8%), and transportation (36.8% vs. 29.9%). Inflation in housing and utilities also remained elevated at 16.8%. The broader rise in prices is largely attributed to higher energy costs following the conflict in the Middle East, with petrol and diesel prices still about 48% and 38% above their pre-war levels, respectively. On a monthly basis, consumer prices increased 0.5% in May, a slowdown from the 2.5% rise recorded in the previous month.