Pakistan's Inflation Set to Remain Elevated Amid Middle East Oil Shock

Pakistan's finance ministry has warned that inflation will remain elevated amid the Middle East oil shock, threatening economic recovery and household purchasing power.

The ministry projected inflation at 10-11 percent for September, citing higher energy costs as a major risk to its outlook. Annual inflation reached 11.1 percent in August, up from 9.2 percent in July and 3.1 percent a year earlier.

The US-Iran war has disrupted Gulf energy supplies and shipping through the Strait of Hormuz, leading to higher fuel costs for Pakistan. The finance ministry said that elevated global oil prices remain the principal risk to its outlook, affecting purchasing power, input costs, and the import bill.