ISLAMABAD: Pakistan may face renewed inflationary pressures due to ongoing global uncertainty and fluctuations in international oil prices, according to the Economic Survey 2025-26 released on Thursday.
The survey warned that geopolitical tensions, particularly conflicts in the Middle East, and volatility in energy markets could affect the country’s inflation outlook and broader macroeconomic stability in the coming months. It stressed the need for policymakers to remain vigilant as external developments continue to pose risks to the economy.
Inflation remained largely under control for most of the fiscal year. However, a sharp rise in global energy prices linked to tensions in the Middle East pushed headline inflation to 7.3 percent in March 2026, reversing some of the gains achieved through economic stabilisation efforts.
In response to growing price pressures, the State Bank of Pakistan increased its key policy rate by 100 basis points to 11.5 percent in April 2026, aiming to contain inflation and maintain economic stability.
Despite these challenges, the survey expressed optimism about Pakistan’s medium-term outlook. It noted that continued fiscal discipline, prudent monetary policies and ongoing structural reforms are expected to improve economic resilience, strengthen competitiveness and support sustainable and inclusive growth in the years ahead.
