Key Takeaways
- Pakistan’s consumer price inflation projected to ease to around 10% in September.
- Energy costs, particularly fuel and electricity, are expected to keep price pressures high.
- Food inflation could remain elevated, with higher prices of essential goods contributing.
Pakistan’s consumer price inflation is expected to ease to around 10% in September, down from 11.15% in August, according to estimates from brokerage houses. Topline Securities, Ismail Iqbal Securities, Abbasi and Company, and Growth Securities project inflation at between 9.9% and 10.5% year-on-year, compared with 11.15% in August and 5.61% in September last year.
Topline Securities expects inflation at 10.25-10.3% year-on-year and 1.3% month-on-month, with fuel prices estimated to have risen 6.5% during the month. The brokerage notes that electricity prices increased by 9.58% on a month-on-month (MoM) basis, while Liquefied Petroleum Gas (LPG) price registered an increase of 2.61%. The rise in electricity charges is mainly due to the higher Charges Adjustment (FCA) of Rs2.0581/kWh compared to Rs0.7503/kWh in August.
Ismail Iqbal Securities expects September inflation at 10.5% year-on-year and 1.4% month-on-month, attributing a larger share of the increase to energy costs. The brokerage states that housing contributes around 55 basis points, with almost all of it coming from a 12.6% rise in electricity charges. Transport adds a further 35 basis points on a 7.3% rise in motor fuel, after daily price revisions pushed petrol and diesel sharply higher through the first half of the month.
Food is expected to contribute about 25 basis points, with onion prices rising 32% during the month and fresh vegetables remaining firm. Ismail Iqbal Securities notes that the difference between food and energy inflation matters, as food spikes usually reverse once supplies return to normal, but higher fuel and power prices tend to stay and push up transport fares, freight costs, and core inflation over time.
Abbasi and Company expects September national CPI inflation at 10.2% year-on-year and 1.1% month-on-month. The brokerage cites higher prices of wheat flour, meat, rice, fresh milk, cooking oil, and vegetable ghee as factors contributing to the increase in the food index. It also highlights higher motor fuel, transport, and housing costs as factors pushing inflation upwards.
The central bank’s policy outlook is complicated by the persistent energy pressures. The increase in electricity charges in September is mainly attributable to the higher Charges Adjustment (FCA) of Rs2.0581/kWh vs. Rs0.7503/kWh in August, along with a positive Quarterly Tariff Adjustment (QTA) of Rs0.5194/kWh.
The rise in energy costs is expected to exert significant upward pressure on transportation costs, while increased electricity and LPG charges are expected to drive inflation. The country’s headline inflation clocked in at 11.1% on a year-on-year (YoY) basis in August 2026, up from 9.2% recorded in July, as shown by Pakistan Bureau of Statistics (PBS) data.
The overall outlook suggests that while inflation may ease slightly in September, the energy sector’s challenges will continue to pose significant risks to the economy and the central bank’s policy decisions.
