Inflation Remains High After 3 Months

Pakistan’s headline inflation dropped to 10.26% in September 2026, a decrease from 11.15% in August, as per figures released by the Pakistan Bureau of Statistics (PBS). This brings the 1QFY27 Consumer Price Index (CPI) to 10.20%, which is more than double the 1QFY26 CPI of 4.30%. September’s inflation is notably higher than the 5.76% recorded in September 2025.

The September figure matched the Bloomberg survey forecast of 10.2%. Core inflation also decreased marginally to approximately 8.6% in September from 8.8% in August, yet it stayed above the 7.0% level a year ago. The September reading indicated average CPI inflation for the first quarter of fiscal year 2026-27 (1QFY27) at 10.20%, as opposed to 4.30% in 1QFY26.

On a month-on-month (MoM) basis, September’s inflation rose by 0.3%, contrasting with a 1.2% surge in August. Urban inflation expanded by 10.4% year-on-year (YoY) in August, compared to 8.7% in July and 3.5% in August 2025. MoM-wise, urban inflation climbed by 0.9%. Rural inflation grew by 12.2% YoY in August, up from 9.9% in July and 2.5% a year earlier.

MoM-wise, rural inflation increased by 1.6%. Sensitive Price Indicator (SPI) inflation spiked by 9.5% YoY in August, a drop from 12.0% in July but still above 2.6% in August 2025. MoM-wise, SPI rose by 0.9%. Wholesale Price Index (WPI) inflation climbed 11.8% YoY in August, compared to 9.4% in July and a 1.0% decline in August 2025.

MoM-wise, WPI rose by 2.0%. Urban non-food, non-energy core inflation increased 8.8% YoY in August, compared to 8.6% in July and 6.9% in August 2025. Rural non-food, non-energy inflation rose 8.5% YoY, compared to 8.1% in July and 7.8% a year earlier. The 20% weighted trimmed mean measure showed urban core inflation at 8.9% YoY in August, while the rural reading stood at 9.1%.