Pakistan’s Finance Division has projected that inflation will stay elevated in a 9.5–10.5% range in October 2026, citing persistent geopolitical tensions, recurring conflict in the Gulf, volatile oil prices, trade disruptions and elevated global inflation as downside risks for the economy.
In its Monthly Economic Update and Outlook for October 2026, the division said the path of prices ahead would remain sensitive to international energy costs, food supplies and base effects. That assessment came even after headline inflation moderated to 10.3% in September from 11.1% in August.
Why the outlook stays high
Officials linked imported cost pressure to higher international commodity prices feeding through Pakistan’s energy import bill and into transport, production and distribution. Brent crude averaged USD116.8 per barrel in September, 28.4% above August, while natural gas prices also rose. The Food and Agriculture Organisation’s Food Price Index increased 1.5% to 136 points, and higher palm oil and fertiliser prices added to import and farm-input costs.
Headline consumer price inflation (CPI) — the broad measure of living costs — averaged 10.2% in July–September of fiscal year 2027, compared with 4.3% in the same quarter a year earlier. In September, transport prices jumped 27.4% year-on-year. Housing, water, electricity, gas and fuel rose 12.4%. Perishable food prices increased 11.8% and non-perishable food 7.6%, pointing to continued strain on household purchasing power.
Crops, growth and the wider picture
The Finance Division said better domestic crop supplies could ease food inflation, while stronger foreign-exchange buffers and more diversified financing had improved Pakistan’s ability to absorb external shocks. Recovery support is expected from agriculture, selected manufacturing, domestic construction, remittances and services exports, though the outlook depends on global conditions.
Revised national accounts put fiscal year 2026 growth at 3.65%, a touch below the earlier 3.70% estimate, with agriculture at 3.50%, industry at 3.34% and services at 3.81%. Provisional maize output was estimated at 9.98 million tonnes (up 12.1%), sugarcane at 97.3 million tonnes (up 8.8%) and rice at 10.2 million tonnes (up 1.8%), while cotton fell 4.8% to 6.71 million bales.
Large-scale manufacturing grew 1.9% in July–August of fiscal year 2027, versus 4.8% a year earlier. On the external side, the current account deficit widened to USD874 million in July–September from USD755 million a year earlier, as goods imports rose 14.3% to USD17.8 billion and exports grew 7.7% to USD8.5 billion. Workers’ remittances increased 14% to USD10.9 billion. A USD3.0 billion sovereign Eurobond in September, alongside higher foreign direct investment and portfolio inflows, helped deliver an overall balance-of-payments surplus of USD3.1 billion for the quarter, against a USD274 million deficit a year earlier.
Timeline: what has happened so far
- August 2026: Headline inflation stood at 11.1%.
- September 2026: Headline inflation eased to 10.3%; Brent averaged USD116.8 a barrel; Pakistan issued a USD3.0 billion Eurobond.
- July–September FY2027: Average CPI inflation was 10.2%, versus 4.3% a year earlier; the current account deficit reached USD874 million.
- October 2026 outlook: The Finance Division projects inflation in a 9.5–10.5% band, with risks tied to energy prices, food supplies and base effects.
Aasan alfaaz mein
Finance Division ke mutabiq October mein mehngai lagbhag 9.5 se 10.5 percent reh sakti hai. September mein yeh 10.3 percent thi, jo August ke 11.1 percent se thori kam hai. Petrol, gas, transport aur khane ki cheezen ab bhi mehngi ho rahi hain, is liye ghar ka kharcha dabao mein hai. Agay mehngai oil aur food ke global rates par bhi depend karegi.
