Consumer price inflation rose 5.8% year-on-year in January, official data from the Pakistan Bureau of Statistics showed on Monday, underscoring the central bank’s warning that price pressures could temporarily breach its target band as economic activity picks up.

The reading comes a week after the State Bank of Pakistan held its policy rate at 10.50%, saying inflation could exceed its 5% to 7% medium-term target range for a few months this year, even as growth gains momentum and imports widen the trade deficit.

The PBS data compared with annual inflation of 5.6% in December, when prices fell on a monthly basis due to lower perishable food costs.

On a month-on-month basis, consumer prices rose 0.4% in January.

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The central bank has said it views the real policy rate as sufficiently positive to stabilise inflation over the medium term, while flagging stronger domestic demand and external pressures as upside risks to prices.

The finance ministry had projected inflation would remain within a 5% to 6% range in January.

An International Monetary Fund staff report has cautioned against premature monetary easing under Pakistan’s $7 billion loan programme, urging policymakers to remain data-dependent to anchor inflation expectations and rebuild external buffers.