Inflation accelerated sharply to 11.1 per cent in August from 9.2 per cent in July, driven by a steep rise in food, housing, utilities and transport costs, pushing price pressures to their highest level in recent months, official data showed on Tuesday. The Pakistan Bureau of Statistics said food inflation jumped to 13.9 per cent in August from 9.2 per cent in July, while housing, water, electricity, gas and other fuels rose 8.87 per cent from 7.1 per cent. Transport inflation surged to 20.17 per cent from 15.1 per cent over the same period.

The latest increase marks a sharp reversal from a year earlier, when consumer inflation stood at just 3.1 per cent in August 2025, highlighting the rapid deterioration in household purchasing power. On a monthly basis, consumer prices rose 1.2 per cent in August, compared with a 0.6 per cent decline in August 2025. Food prices were particularly volatile. Tomatoes surged 128 per cent year-on-year (YoY) and onions 124 per cent, while wheat prices rose 87 per cent and wheat flour increased 73 per cent. Vegetables became 17 per cent more expensive, fresh fruit 16 per cent and meat 15 per cent.

Some staples, however, became cheaper. Potato prices fell 23 per cent, chicken 18.5 per cent, sugar 17 per cent, besan 14 per cent, gram pulse 13.8 per cent, whole gram 13 per cent and masoor pulse 12 per cent. Beans and eggs each declined 11.4 per cent. Outside the food basket, liquefied hydrocarbons jumped 56 per cent, motor vehicle taxes rose 39 per cent, postal services 35 per cent, while footwear and transport services each became 29 per cent more expensive. Motor fuel prices increased 24 per cent, while communication services rose 19 per cent. Inflationary pressure was broad-based geographically.

Urban inflation climbed to 10.4 per cent from 8.7 per cent in July, while rural inflation rose to 12.2 per cent from 9.9 per cent. A year earlier, urban and rural inflation were only 3.5 per cent and 2.5 per cent, respectively. The Wholesale Price Index, a key gauge of pipeline price pressures, also accelerated to 11.8 per cent from 9.4 per cent in July, compared with just 1 per cent a year earlier. Core inflation, which excludes volatile food and energy prices, also edged higher. Urban core inflation rose to 8.8 per cent from 8.6 per cent, while rural core inflation increased to 8.5 per cent from 8.1 per cent. For fiscal year 2025-26, average inflation stood at 7.05 per cent, up from 4.49 per cent in FY25 and slightly above the State Bank of Pakistan's 5-7 per cent target range.

Economists have attributed part of the recent inflationary pressure to tensions in the Middle East and volatile global crude prices, which can quickly feed into Pakistan's import bill and domestic prices because the country remains heavily dependent on imported energy. The State Bank of Pakistan has kept its policy rate unchanged at 11.5 per cent, as it balances renewed inflationary pressures against the need to support economic activity.