Pakistan inflation to hover near 9% in April 2026

April 30, 2026 (MLN): Pakistan’s inflation is projected to remain within the 8–9% range in April 2026, which reflects persistent but manageable price pressures amid global uncertainty.

Rising international oil prices and ongoing supply chain constraints continue to influence the domestic price environment, though overall inflation remains within the government’s annual target.

Despite risks stemming from geopolitical tensions particularly the Middle East conflict the broader macroeconomic outlook suggests stability, supported by steady demand and resilient economic fundamentals.

The economy has maintained a stable trajectory through the third quarter of FY2026, with improving growth momentum across key sectors. Large-Scale Manufacturing (LSM) recorded a 5.9% expansion during July–February, reversing last year’s contraction, driven largely by automobiles, textiles, food, and petroleum products.

The automobile sector, in particular, posted strong gains, with production of trucks, buses, and cars rising sharply. Cement dispatches also increased by nearly 10%, signaling strengthening domestic construction activity. Meanwhile, the external sector showed resilience, with three consecutive monthly current account surpluses, supported by higher remittances and a notable rise in IT exports.

According to the Monthly Economic Update & Outlook, April 2026 report by the Government of Pakistan, the country’s macroeconomic position continues to strengthen on the back of prudent fiscal management and ongoing reforms.

The fiscal deficit narrowed significantly to 0.1% of GDP during July–February, while tax revenues posted solid growth. External credibility improved further following a successful IMF staff-level agreement, timely Eurobond repayments, and a stable sovereign rating outlook.

The report highlights that, despite emerging risks from rising energy costs and global uncertainty, Pakistan is better positioned than in previous periods to absorb external shocks.

Agricultural performance has also contributed positively, with wheat production estimated at 29.31 million tonnes for the Rabi season, alongside strong growth in crops such as potatoes and gram.

Targets for the upcoming Kharif season remain ambitious, supported by adequate water availability, improved access to inputs, and increased agricultural credit. At the same time, challenges such as climate stress and high fuel costs continue to weigh on the sector’s outlook.

On the external front, remittances remained a key pillar, rising to $30.3 billion, while foreign direct investment reached $1.4 billion, led by inflows into power and financial services. Although the trade deficit widened due to higher imports particularly petroleum and palm oil the current account remained broadly balanced. Foreign exchange reserves stood at $20.6 billion in mid-April, providing a buffer against external volatility.

Overall, Pakistan’s economy appears to be on a firmer footing, with improving fiscal discipline, stable external accounts, and a gradual recovery in industrial activity. While geopolitical risks and inflationary pressures persist, timely policy responses and strengthening macroeconomic fundamentals are expected to sustain the country’s growth momentum in the months ahead.

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