Pakistan’s headline inflation slowed to 9.2% year-on-year in July 2026, easing from 11.1% in June but more than doubling from 4.1% recorded in the same month last year, according to data released by the Pakistan Bureau of Statistics (PBS) on Monday.

On a month-on-month basis, the consumer price index (CPI) rose 1.2% in July, compared with a 0.3% decline in June. Monthly inflation had increased 2.9% in July 2025.

Urban inflation stood at 8.7% year-on-year in July, down from 11.2% in June but higher than 4.4% a year earlier. On a monthly basis, urban CPI rose 1.2%, reversing a 0.5% decline in June.

Rural inflation came in at 9.9% year-on-year, compared with 10.9% in the previous month and 3.5% in July 2025. On a monthly basis, rural CPI increased 1.2%, after remaining unchanged in June.

Government outlook

The July inflation reading was in line with the Finance Division’s latest monthly outlook, which projected CPI inflation in the 9-10% range, citing pressure from higher global oil prices.

The outlook came as Pakistan’s foreign direct investment (FDI) fell 33.9% in fiscal year 2025-26 to $1.64 billion, down from $2.48 billion a year earlier.

Last week, the State Bank of Pakistan’s Monetary Policy Committee kept the benchmark policy rate unchanged at 11.5% in its first meeting of fiscal year 2026-27.

Speaking after the policy decision, SBP Governor Jameel Ahmad had said inflation was expected to moderate in July and remain within the central bank’s target range later in the fiscal year.

“We expect the CPI to clock in at the upper band of our target range of 5-7% by the end of this fiscal year,” Ahmad said.