Pakistan’s inflation rose by 3.2 per cent year-on-year in June, right in line with the finance ministry’s forecast of 3-4 per cent issued just a day earlier, according to fresh data from the Pakistan Bureau of Statistics.

Month-on-month, inflation edged up 0.2 per cent in June, reversing the 0.2 per cent dip recorded in May.

The uptick comes shortly after the State Bank of Pakistan (SBP) opted to hold steady on its key interest rate at 11 per cent in June, suggesting a wait-and-watch approach. In its latest monetary policy statement, the SBP projected that inflation might show short-term swings but would eventually settle within its 5-7 per cent target band.

June’s figures follow the presentation of the federal budget, which introduced fresh tax measures and subsidy cuts – key steps toward locking in a long-term loan deal with the International Monetary Fund (IMF).

Analysts, however, warn that higher taxes and surging energy prices could fuel inflationary pressure in the second half of the year.

On a positive note, the Pakistan Stock Exchange (PSX) kicked off the new fiscal year on a high note, with the benchmark index soaring 2.3 per cent to a record 128,475.7 points, boosted by investor confidence in fiscal reforms and stable interest rates.