New Delhi, May 21 (IANS) Pakistan’s headline inflation is expected to accelerate sharply to 12.2 per cent year-on-year (YoY) in May 2026, driven by rising fuel and food prices despite some relief from lower electricity tariffs, a report has said.

The data compiled by Optimus Capital Management projected that Pakistan’s National Consumer Price Index (NCPI) would rise around 1 per cent month-on-month, while core inflation is likely to remain elevated at 8.4 per cent year-on-year.

According to the report cited by The Express Tribune, the transport index is expected to record a steep increase of nearly 6.9 per cent on a monthly basis, mainly due to an anticipated 9.5 per cent jump in domestic fuel prices.

Although international oil prices have eased slightly compared to the previous month, fuel costs in Pakistan remain high because of increased premiums and Inland Freight Equalisation Margin (IFEM) adjustments.

As a result, energy inflation is projected to surge to around 39 per cent year-on-year in May, the report said.

The report noted that the housing index may offer some relief, with a projected decline of 1.2 per cent month-on-month due to reduced electricity tariffs.

However, the decrease is unlikely to offset the broader inflationary impact coming from transport and food categories.

Optimus analyst Yasin Iqbal Kodvavi said the easing trend in food inflation witnessed earlier is beginning to fade.

Food inflation is now expected to rise about 1.5 per cent month-on-month and nearly 9 per cent year-on-year.

The increase is being driven largely by higher wheat and wheat flour prices, both of which are projected to rise around 7 per cent during the month.

Fresh milk and milk products are also expected to become costlier, with prices likely to rise around 2.7 per cent month-on-month.

Kodvavi said higher transportation costs, expensive fertilisers and fluctuating procurement policies are contributing significantly to rising food prices.

–IANS

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