Karachi, March 27, 2026 – Analysts at Arif Habib Limited have projected that headline inflation for March 2026 will clock in at 7.6% Year on Year (YoY), up sharply from 0.7% YoY recorded in March 2025. The increase is largely attributed to a low base effect, as last year’s March figure was comparatively subdued.
Core inflation, measured by the Non-Food Non-Energy (NFNE) index, is expected to moderate at 8.3% YoY, down from 9.2% in March 2025. On a cumulative basis, average inflation for the first nine months of FY26 is likely to settle at 5.7%, slightly higher than 5.4% in the same period last year. Meanwhile, NFNE inflation is projected at 7.6%, showing moderation from 10.3% in the corresponding period.
On a Month-on-Month (MoM) basis, headline inflation is forecast to rise by 1.5%, driven primarily by the transport and housing indices. The food index is expected to see a slight decline of 0.1% MoM, led by lower prices for tomatoes, eggs, vegetables, and wheat. The housing index is projected to rise by 1.8% MoM, reflecting higher electricity charges following a positive Fuel Cost Adjustment (FCA) of PKR 1.63 per KWH. Transport costs are set to surge by 15.6% MoM due to higher fuel prices.
Category-Wise YoY Inflation Projection for March 2026
| Category | Inflation YoY (%) |
| Food | 3.7 |
| Housing | 11.7 |
| Transport | 16.3 |
| Education | 7.9 |
| Health | 7.5 |
| Clothing & Footwear | 5.2 |
| Restaurants & Hotels | 5.3 |
| Miscellaneous | 21.7 |
According to AHL, inflation in March 2026 is expected to remain broad-based, reflecting price pressures across essential commodities, energy, and services. Rising fuel and electricity costs are major contributors, emphasizing challenges for households and policymakers in managing cost-of-living pressures.