Finance ministry sees April inflation at 8-9%

Pakistan’s Federal Ministry of Finance has projected that inflation reading would remain in single digit, within the range of 8-9% for April 2026, disagreeing with local research houses that estimated the number to be returned into double digits in the month.

“Amid ongoing supply chain constraints [due to geopolitical tension in Middle East], inflation is anticipated to remain within the range of 8-9% for April 2026,” the ministry said in its latest Monthly Economic Update & Outlook April 2026 published on Thursday.

The consumer price index (CPI) inflation forecast for April 2026, however, was notably higher compared the 0.3% in same month of the last year and 7.3% recorded in the prior month of March 2026.

The ministry said rising international oil prices were being translated domestically overtime, changing the baseline situation.

Global oil price hit four year high at $126 per barrel on Thursday.

On average during Jul-Mar FY2026, according to the ministry, inflation stood at 5.7% against 5.3% during the same period last year.

Meanwhile, Insight Securities Head of Research Muhammad Shahroz said in a commentary that headline inflation could stand at 10.1% for April 2026.

“The [expected] increase is mainly driven by low base effect coupled with elevated food and housing index. On month-on-month basis, inflation is expected to inch up by 1.7%. This surge is primarily driven by higher retail fuel price coupled with elevated LPG prices,“ he said.

The rising inflation rate agreed State Bank of Pakistan (SBP) to increase its key policy rate by 100 basis points to 11.5% this week. This was the first hike in the past three years.

Economy to remain firm despite ME conflict, says ministry

The Ministry of Finance further said despite prevailing geopolitical uncertainties, key macroeconomic indicators had remained stable, including sustained growth momentum in large-scale manufacturing (LSM), particularly reflected in broad-based recovery in the automobiles sector, and rising cement dispatches, pointing to improving domestic demand.

“Based on this momentum, economic activity is expected to remain firm,” it said.

Despite the potential risk posed by Middle East war and consequently global commodity prices rise and supply chain disturbance, the external position was likely to remain stable, underpinned by higher remittance inflows and IT exports, the ministry said.

Overall, the economy appeared well-positioned to continue its growth trajectory, supported by strengthening of macroeconomic fundamentals vis-a-vis appropriate and swift policy response to minimise the adverse impacts, the monthly outlook report said.