Inflation hits double digits for first time in 21 months

The last time inflation was above 10pc was in July 2024, when the Consumer Price Index (CPI) was recorded at 11.1pc. For consumers, the April spike reflects a growing squeeze on daily expenses, as higher fuel and transport charges, along with rising prices of perishable food items, continue to erode purchasing power, even as some relief in wheat and flour prices offers only limited respite. The continued increase in monthly inflation, measured by the CPI basket containing several goods and services, has pushed it beyond the earlier comfort range as domestic energy tariffs registered a sharp rise in April. Energy prices rose sharply during the month due to the continued blockage of the Strait of Hormuz, through which most of Pakistan’s energy imports are routed. Prime Minister Shehbaz Sharif has already stated that the weekly oil import bill has jumped to $800 million from $300m before the US-Israel war began on Feb 28. The increase in prices during April was largely driven by a steep rise in transport, which surged by 15.47pc over the previous month at the national level. Perishable food items also recorded a sharp increase of 15.25pc, highlighting volatility in essential commodities. Housing, water, electricity, gas and fuels registered a 2.43pc increase, adding further pressure on household budgets. The State Bank of Pakistan (SBP) increased its policy rate to 11.50pc from 10.50pc in response to rising inflation. The central bank had kept the policy rate at 10.5pc unchanged, effective from Dec 16, 2025. Former economic advisor Dr Ashfaq H. Khan has criticised the central bank’s decision to increase the interest rate. He