Pakistan's Inflation Rate Stabilises at 10.3%, Fuel Prices Contribute to Rise

The inflation rate in Pakistan slowed down to 10.3% in September but remained higher than the official forecast due to increasing prices of electricity and fuel, which offset the positive impact of a significant slowdown in food prices.

According to the Pakistan Bureau of Statistics (PBS), the energy-group prices further increased compared to a year ago, keeping the overall annual inflation rate at 10.3%. This was slightly higher than the official projection of the Planning Commission, which had assumed an average inflation of 7% to 8% for the current fiscal year despite the Middle East conflict.

The monthly inflation marginally inched up to 1.3% due to a constant increase in fuel prices, which was the highest rate since April this year. The government's assessment is based on the assumption that if the situation normalises until October 2026 and the average Brent crude price stabilises at $80 per barrel in the current fiscal year, the inflation will remain at 7.5%.

However, if the oil price remains at around $100 per barrel till December, the projected inflation may increase to 8.2%. The government has set the inflation target for this fiscal year at 8.2%, but it said that due to an anticipated moderation in global crude oil prices, improved agricultural output, exchange rate stability, effective administrative measures and a favourable base effect during the second half, the inflation is projected to stay within the 7% to 8% range.