Inflation in Pakistan has shown signs of stabilization, with the Consumer Price Index (CPI) recording a year-on-year increase of 5.8% in January 2026, as reported by the Pakistan Bureau of Statistics (PBS) and covered by Business Recorder. This is a significant rise from the 2.4% recorded in January 2025. Over the first seven months of the fiscal year 2026 (7MFY26), inflation averaged 5.2%, down from 6.5% in the same period last year. The State Bank of Pakistan (SBP) has maintained its policy rate at 10.5%, despite expectations of a rate cut, citing that inflation could temporarily exceed its medium-term target range of 5-7% due to stronger domestic demand and external pressures (Dawn, Business Recorder). Interestingly, the decline in inflation has been more pronounced in urban areas, with urban inflation averaging 5.3% in 7MFY26, down from 7.8% last year, while rural inflation has increased slightly to 5.1% from 4.6% (Business Recorder).