ISLAMABAD: Surging consumer inflation has mounted pressure on household budgets, with official data showing prices rose 11.7 per cent year-on-year in May, driven by sharp increases in energy and essential food prices.

The continued increase in monthly inflation, measured by the Consumer Price Index (CPI), has pushed it beyond the government’s earlier projection, mainly because of an unprecedented increase in the price of petroleum products.

In May, energy prices were slightly revised downward, but the impact on overall inflation was minimal. The Strait of Hormuz remains blocked, through which most of Pakistan’s energy imports are routed. Prime Minister Shehbaz Sharif has already stated that the weekly oil import bill has increased significantly.

The increase in prices was largely driven by a steep rise in transport charges, which surged by 36.78pc year-on-year. Month-on-month, it increased by 5.13pc in May.

Non-perishable food items also recorded 9.42pc rise, highlighting volatility in essential commodities. Housing, water, electricity, gas and fuels registered a 16.78pc increase, adding further pressure on household budgets.

The SBP increased its policy rate to 11.50pc on April 27 in response to rising inflation after maintaining it at 10.50pc for almost two years.

Inflation increased by 0.5pc compared with the preceding month, according to data released on Monday by the Pakistan Bureau of Statistics.

The data showed that urban inflation was slightly higher at 11.8pc, compared with 11.5pc in rural areas, on an annual basis. On a monthly basis, urban prices increased by 0.7pc, while rural inflation rose by 0.3pc.

The average inflation during July-May FY26 was recorded at 6.69pc, compared with 4.61pc in the corresponding months last year. This reading is despite a high base effect from last year.

The government has projected an inflation target of 7pc for FY26.

Food inflation in May increased by 6.5pc in urban areas and 8.5pc in rural areas. On a month-on-month basis, food inflation increased 0.2pc in urban areas and 0.2pc in rural areas. Non-food inflation reached 15.2pc in urban areas, and 14.2pc in rural regions. This indicates that non-food inflation has remained very high and has steadily risen over the past few months.

In May, core inflation — excluding volatile food and energy components — stood at 9pc in urban areas and 8.4pc in rural areas.

Urban food items that saw notable month-on-month price increases incl­uded wheat flour (11.21pc), wheat (7.78pc), ice cream (5.49pc), potatoes (4.01pc), bakery and confectionery (2.40pc), meat (2.25pc), dessert preparation (1.84pc), milk products (1.46pc), milk fresh (1.41pc), sweetmeat (1.37pc), cooking oil (0.91pc) and vegetable ghee (0.88pc).

Non-food categories also witnessed significant price hikes, including footware (29.04pc), postal services (9.89pc), motor fuel (7.62pc), transport services (3.70pc), construction wage rates (3.64pc), major tools & equipment (3.20pc), garbage collection (2.69pc), plastic products (2.63pc), mechanical services (2.33pc), washing soap/detergents/match box (2.30pc), tailoring (1.92pc) and household equipment (1.77pc).

Published in Dawn, June 2nd, 2026