Oil Shock Hits Hard: Pakistan Stares At Double-Digit Inflation

The report, as cited by Dawn, projects that under current conditions, inflation in Pakistan could average between 9 and 10 per cent over the next year, with fourth-quarter FY26 figures expected to exceed 11 per cent. These estimates are based on oil at USD 100 per barrel, noting that every USD 10 spike adds roughly 50 basis points to the inflation burden. Should prices hit USD 120 per barrel, annual inflation could reach 11 per cent, likely forcing the State Bank of Pakistan into further aggressive interest rate hikes.