ISLAMABAD – Pakistan is facing sharp rise in the cost of living, driven by years of high inflation, and recent US-Iran war that continues to leave deep economic scars.
Although inflationary pressure had shown some moderation before geopolitical tensions, the overall price environment remains stubbornly high. At the same time, rising instability in the Gulf region is being closely monitored for its ripple effects on global oil prices, energy security, shipping routes, and foreign investment flows into emerging markets like Pakistan.
Pakistan Cost of Living in 2022 vs 2026
| Category / Item | 2022 (Approx.) | 2026 (May, Approx.) | Change |
|---|---|---|---|
| Petrol (1L) | Rs. 150 | Rs. 399–415 | ~2.7× increase |
| Diesel (1L) | Rs. 144 | Rs. 414+ | ~3× increase |
| Milk (1L) | Rs. 120–160 | Rs. 200–240 | +50–100% |
| Flour (20kg) | Rs. 1,100–1,800 | Rs. 2,050–2,300+ | ~50–100% rise |
| Sugar (1kg) | Rs. 75–100 | Rs. 150–188 | ~80–100% increase |
| Rice (1kg) | Rs. 100–150 | Rs. 150–300 | Up to 100% rise |
| Chicken (1kg) | Rs. 300–450 | Rs. 400–600+ | Big increase |
| Eggs (12) | ~Rs. 150–200 | Rs. 280–350 | Sharp rise |
| Bread (500g) | Lower price level | Rs. 150–160 | ~50–80% increase |
| 1BR Rent | Rs. 15,000–30,000 | ~Rs. 36,000 | ~50–100%+ increase |
| 1BR Rent Outside | Rs. 10,000–20,000 | Rs. 20,000–22,000 | Moderate rise |
| Utilities (85m²) | Rs. 10,000–20,000 | Rs. 20,000–38,000 | Nearly doubled |
| Cheap Meal | Rs. 300–400 | Rs. 600 | ~50–100% increase |
| Meal for 2 | Rs. 2,000–3,000 | Rs. 4,000 | ~50–100% rise |
Electricity Prices
| Category | 2022 (Approx.) | 2026 (May, Approx.) |
| Electricity (per kWh / unit) | Rs. 15–25 (slab-based) | Rs. 30–35+ average |
| Utilities (monthly incl. electricity) | Rs. 10,000–20,000 | Rs. 20,000–38,000+ |
On ground, the impact is already severe. Consumers across the country report that prices of essential goods have jumped by around 20–25%, with basic staples such as flour alone increasing by approximately Rs50 to Rs100. While incomes have largely remained unchanged, this mismatch has rapidly eroded household purchasing power. The strain is not confined to homes—it is increasingly spilling into workplaces, where reduced financial stability among employees is affecting productivity long before formal human resource systems can capture the decline.
Despite this pressure, Pakistan still ranks among the world’s more affordable countries in nominal terms. In 2026, the Cost of Living Index stands at a very low 19.85, while the Purchasing Power Index is also low at 31.81. Other national indicators present a mixed picture: Safety Index is moderate at 57.87, Health Care Index at 59.46, and Traffic Commute Time Index at 38.17.
Everyday expenses reveal the pressure more clearly. A basic inexpensive restaurant meal costs around Rs500, while a mid-range three-course meal for two can reach Rs4,000. Fast food combo meals such as McDonald’s equivalents are around Rs1,500. Coffee, soft drinks, and bottled water also show steady increases, with cappuccino averaging Rs560.80.
In markets, essential food items remain relatively affordable but are steadily rising. Milk costs about Rs227 per litre, bread around Rs120-150, rice Rs331 per kg, and eggs approximately Rs330-350 per dozen. Chicken fillets average Rs794 per kg, while beef reaches about Rs1,319 per kg. Fruits and vegetables such as apples (Rs311), bananas (Rs181), tomatoes (Rs143), potatoes (Rs97), and onions (Rs116) remain accessible but are increasingly sensitive to inflationary spikes.
Transportation costs continue to weigh heavily on households. Local public transport fares are around Rs50 per trip, while monthly passes cost about Rs2,500. Taxi services start at Rs250, with per-kilometre charges averaging Rs150. Fuel prices are also high, with petrol costing roughly Rs277 per litre. Vehicle ownership remains expensive, with new cars such as a Toyota Corolla priced at over Rs7 million.
City-level data highlights variation across urban centres shows Islamabad, the most expensive city with a cost-of-living index of 24.1, followed by Karachi (21.4), Lahore (21.1), and Rawalpindi (21.1). While differences exist, all major cities remain relatively low-cost globally but are increasingly pressured by inflation.
