War spillover pushes SPI up 8.24% YoY

Pakistan's short-term inflation extended its upward trend, with the Sensitive Price Indicator (SPI) rising sharply by 8.24% year-on-year for the week ended March 26, 2026, as price pressures persisted even after Ramazan and began reflecting spillover effects of tensions in the Middle East. Weekly inflation also accelerated, increasing by 0.97% compared to a 0.21% rise in the previous week, signalling a renewed pickup in prices of essential commodities. The data shows that inflation, which had shown some moderation earlier, is once again gaining momentum across key household items. According to the Pakistan Bureau of Statistics (PBS), out of 51 essential items, prices of 23 items increased during the week, six items declined, while 22 remained stable, indicating a broad-based rise in prices. Food items remained the major driver of weekly inflation. Onion prices surged by over 18%, tomatoes by more than 11%, potatoes by 8%, and chicken by around 8.7%. Prices of eggs, garlic, mutton and beef also increased, adding to pressure on household budgets. Energy costs also contributed significantly to the weekly increase. LPG prices rose by more than 10%, while electricity charges increased by over 6%, highlighting the continued impact of energy price adjustments on overall inflation. On a yearly basis, the inflation trend remains elevated, with both food and energy items recording notable increases. Wheat flour prices rose by about 25.76%, onions by over 25%, and red chilli by more than 15%. Meat prices also remained high, with beef up 13% and mutton increasing by 12.41% compared to last year. Energy prices recorded even sharper increases on an annual basis. LPG surged by nearly 35%, diesel by around 30%, and gas charges by close to 30%, while petrol prices increased by 25.75%, underscoring the persistent burden of fuel costs on inflation. Despite the overall increase, some items provided relief, though to a limited extent. Prices of potatoes, pulses, eggs, garlic and sugar declined on a yearly basis. However, these reductions were not enough to offset the broader rise in essential goods. A breakdown by income groups shows that inflation continues to affect lower-income households significantly. The lowest income group (earning up to Rs17,732 per month) recorded a 7.02% annual increase, while the second income group saw the highest rise at 8.76%. Other income brackets experienced inflation ranging between 7.15% and 7.64%. The SPI, which tracks essential commodity prices across urban centres, indicates that inflationary pressures remain persistent, driven by both domestic factors and external developments, including global uncertainty and rising energy costs.