Karachi: Pakistan's inflation rate is projected to increase in January 2026, with the Consumer Price Index (CPI) expected to range between 5.75% and 6.25% year-on-year, compared to 5.61% in December 2025 and 2.40% in January 2025. The month-on-month inflation for January 2026 is estimated at 0.57%.

According to JS Global, the rise in both year-on-year and month-on-month inflation rates is primarily attributed to escalating food prices. The food inflation for January 2026 has risen by 1.02% month-on-month, driven by significant increases in the prices of chicken (21%), wheat (14%), and wheat flour (10%). However, the prices of potatoes, onions, and sugar decreased by 34%, 26%, and 11%, respectively.

In the housing, water, electricity, and gas category, prices are expected to climb by 0.99% month-on-month due to a scheduled quarterly rent adjustment estimated at 1.6%. The price of liquefied petroleum gas (LPG) is also predicted to rise by 0.96% month-on-month. Conversely, electricity charges are anticipated to fall by 0.11% month-on-month, influenced by a quarterly tariff adjustment and a fuel charges adjustment.

The transport segment is projected to decrease by 2.92% month-on-month, largely due to a 6% drop in motor fuel prices, with petrol and high-speed diesel declining by 3.9% and 8.0%, respectively. Real interest rates in January 2026 are expected to reach 425-475 basis points, surpassing Pakistan's historic average of 200-300 basis points. A significant shift in global commodity prices is noted as a potential risk that could impact the inflation trajectory in the future.