Finance ministry sees January inflation in Pakistan at 5–6%

Pakistan’s inflation is projected to remain within the range of 5-6% in January 2026, the Finance Division said on Tuesday.

In its Monthly Economic Update & Outlook January 2026 released today, the Ministry of Finance said that Pakistan’s economy was well positioned to sustain its growth momentum in FY2026, “supported by the encouraging performance of LSM and other high-frequency indicators”.

The report said that the positive trajectory reflects the impact of prudent policies, ongoing structural reforms, and easing of monetary conditions due to subsiding inflationary pressures.

The report comes after the State Bank of Pakistan (SBP) projected Pakistan’s inflation to be above 7% in some months of the current fiscal year’s second half.

This was announced by SBP Governor Jameel Ahmad following the first Monetary Policy Committee (MPC) meeting of 2026 on Monday.

The SBP decided to keep its benchmark policy rate unchanged at 10.5%, saying that economic activity continues to gain momentum faster than anticipated, mainly led by domestic-oriented sectors.

Moreover, the SBP governor presented an upbeat outlook for the economy, revising the GDP growth forecast upward, ranging 3.75-4.75% for FY26, and indicated that SBP’s foreign exchange reserves are expected to reach an all-time high of USD 20.2 billion by the end of December 2026.

As per the figures released by the Pakistan Bureau of Statistics, the CPI in December decreased by 0.4% on a month-on-month (MoM) basis and decreased by 0.1% on a YoY basis.

Meanwhile, the Ministry of Finance report continued that on the external front, the current account is projected to remain in a deficit; “however, robust remittance inflows and steady performance in IT and services exports are likely to cushion external pressures”.

The improved fiscal management is also expected to continue supporting the macroeconomic stability, it said.