By Moaaz Manzoor

Pakistan's annual inflation eased to 11.1% in June 2026 from 11.7% in May 2026, while consumer prices declined 0.3% on a month-on-month basis, according to the Pakistan Bureau of Statistics' (PBS) Monthly Review on Price Indices.

The monthly decline marked the first fall in consumer prices since March, although annual inflation remained in double digits. The latest figures also showed that average inflation during FY2025-26 stood at 7.05%, compared with 4.49% in FY2024-25. On a June-over-June basis, national inflation measured 11.07%, while urban and rural inflation stood at 11.17% and 10.92%, respectively.

The moderation in June inflation came amid contrasting price movements across the consumer basket. Several essential food items became more expensive during the month, while lower fuel and electricity costs helped pull down the overall Consumer Price Index (CPI).

Among food items, tomatoes recorded the sharpest monthly increase, surging 90.1% in urban areas and 90.2% in rural areas. Onion prices rose 20.8% in urban markets and 22.3% in rural markets, while potatoes increased 17.8% and 36.5%, respectively. Prices of wheat flour also became more expensive, rising 2.2% in urban areas and 1% in rural areas during June. Prices of vegetable ghee, cooking oil and fresh milk also registered monthly increases.

The increase in food prices was partly offset by declines in several non-food items. Urban chicken prices fell 22.4% during June, while egg prices declined 10.7%. In rural areas, chicken and egg prices dropped 21.0% and 11.6%, respectively. Motor fuel prices fell 12.1% in urban areas and 12.7% in rural areas, while electricity charges declined 4.3% in both regions.

Inflation slowed across both urban and rural areas during the month. Urban annual inflation eased to 11.2% in June from 11.8% in May, while urban consumer prices declined 0.5% compared with May 2026. Rural inflation moderated to 10.9% from 11.5%, while the rural price index remained unchanged during the month.

Across major expenditure groups, housing, water, electricity, gas and fuels recorded the highest annual increase, rising 15.5% over June 2025. Transport costs were 25.7% higher than a year earlier despite the monthly decline in fuel prices.

Other inflation indicators presented a mixed picture. The Sensitive Price Indicator (SPI), which tracks the prices of essential commodities, increased 12.8% year-on-year and 0.7% compared with May 2026. Meanwhile, the Wholesale Price Index (WPI) rose 10.7% over June 2025 but declined 1.2% on a month-on-month basis, reflecting lower wholesale prices during June.

Credit: INP-WealthPk