A key inflation measure rose sharply in March, hitting its highest level in three years, driven largely by a spike in gas prices tied to the Iran war. The data points to renewed pressure on household costs after months of slow but steady progress in bringing inflation down. Gas prices are a direct transmission channel from geopolitical conflict to everyday spending. When energy costs rise, they feed into transport, logistics, and goods prices across the economy. The Federal Reserve watches these inflation readings closely before deciding whether to cut interest rates. A hotter-than-expected print makes near-term rate cuts less likely, since the Fed needs confidence that inflation is moving sustainably lower. For borrowers, that means mortgage rates, car loans, and credit card rates stay elevated for longer. The next question is whether gas prices stabilize or the conflict escalates further, which would keep inflation pressure alive heading into the summer.
Pakistan's economy grew 3.7 percent in FY2026, its fastest rate in four years, according to the Pakistan Economic Survey presented by Finance Minister Muhammad Aurangzeb. Growth beat last year's 3.18 percent but missed the 4.2 percent target, with floods, regional conflict, and weaker food exports cited as key drags.
The Union government released an additional Rs 1,09,019 crore in tax devolution to states on August 1, 2026, separate from the regular monthly transfer. The lump-sum release aims to accelerate state capital spending in the July-September quarter, with Uttar Pradesh, Bihar, and Madhya Pradesh among the top recipients.
US mortgage rates have risen to a one-year high as markets weigh Federal Reserve rate uncertainty and Middle East conflict-driven inflation fears. Higher rates increase monthly payments for new buyers and are likely to further suppress housing market activity and refinancing.
Pakistan's Sensitive Price Index rose 13.52 percent year on year for the week ending July 2, 2026, marking 45 consecutive weeks of annual gains. Electricity up 49 percent, wheat flour up 68 percent, and LPG up 44 percent year on year are the main drivers.
