Inflation Rate Cools Down in Pakistan, But Uncertainty Lingers
The inflation rate in Pakistan has cooled down to single digits after reaching over 10% in the previous quarter. According to recent data, the Consumer Price Index (CPI) was recorded at 9.2% in July 2026, a slight decrease from the previous month's 11.1%. However, this reading is higher than analysts' expectations, with a month-on-month increase of 1.2%, despite a reversal in energy prices.
The main contributors to inflation were food items, particularly tomatoes and wheat, which saw significant price hikes. The communication sub-index also experienced an abnormal increase, while motor vehicle taxes were sharply revised upwards, causing the transportation index to rise by 15% year-on-year.
Looking ahead, inflation is expected to hover between 9.5% and 10.5% over the next two months, with uncertainty surrounding oil prices due to the ongoing US-Iran conflict. This suggests that a rate cut in September may not be imminent.