Shafaqna Pakistan: The Israel–US war on Iran has also had economic repercussions for Pakistan, where inflation has returned to double-digit levels and climbed to a 74-week high, largely driven by rising energy costs. These increases have, through a chain reaction, pushed up the prices of essential food items.
The Sensitive Price Indicator (SPI) has recorded a 12.15% rise on a year-on-year basis. Recent data indicates that year-on-year inflation has reached its highest level in 74 weeks, underscoring a significant jump in the cost of living compared to the same period last year.
Analysts at Topline Securities noted that this year-on-year surge represents a 74-week peak, highlighting the severity of the recent inflationary pressure.
They further explained that inflation had remained relatively stable for most of late 2025, with SPI-based readings staying at lower levels and even dropping to around 2.4% in early January 2026, largely due to a low base effect. However, this trend has reversed sharply in recent months.
The current reading represents a substantial jump from the 4-5% levels recorded in February 2026, pointing to a rapid build-up of price pressure within a short span.
This abrupt spike is primarily due to volatility in global energy markets following the escalating geopolitical tensions in the Middle East. As international oil prices surged, the impact transmitted quickly into Pakistan’s domestic economy, where fuel costs play a central role in determining the overall inflation.
Higher petrol, diesel and LPG prices have increased transportation and logistics costs, which in turn have pushed up prices of essential commodities across the board.
The inflation surge is being led overwhelmingly by energy prices, with diesel prices soaring 101.02% YoY, petrol rising 48.70% and LPG increasing 65.86%, reflecting the transmission of global oil market shocks into Pakistan’s domestic pricing structure. The escalation follows geopolitical tensions in the Middle East, which have dented supply expectations and driven international crude prices higher.
This energy shock has had a pronounced second-round effect on food inflation. Key staples have recorded sharp increases, with onion prices up 37.80%, wheat flour 30.10% and tomatoes 23.07% on a yearly basis. Protein sources have also become more expensive, with mutton and beef prices rising nearly 15% and 14%, respectively, further squeezing household budgets.
On a weekly basis, the situation appears even more acute, as fuel prices surged dramatically, with diesel up 54.71% and petrol 17.86%, triggering an immediate increase in transportation and logistics costs. This has translated into rising prices of perishable food items such as tomatoes (9.35%), potatoes (4.13%) and onions (3.84%) within a week.
The data also highlights the disproportionate burden on higher consumption groups, where SPI inflation reached 12.25%, although lower-income segments also faced significant pressure with a 9.33% increase, indicating broad-based inflation impact across income classes.
Source: Express Tribune
