Pakistan's inflation rate is expected to rise to about 10% in October 2026, according to market research cited from Karachi, as higher electricity charges, petrol prices and food costs keep upward pressure on the National Consumer Price Index (NCPI)—the main measure of consumer prices. Growth Securities projects a 1.5% month-on-month rise in the NCPI for October, against 6.2% year-on-year, and says average inflation over the first four months of FY27 could reach 10.2%, well above 4.8% in the same stretch of FY26 and above the government's expected FY27 average of 8.9%.
That outlook is sharpening debate ahead of the State Bank of Pakistan (SBP)—the central bank—Monetary Policy Committee meeting on 26 October 2026, with one brokerage leaning toward a rate hike and another arguing for a hold.
Drivers behind the October outlook
Growth Securities, in a note by Nasheed Malik, links the October projection mainly to transport, housing and food. The transport index is seen rising by about 0.15% to 0.20% month-on-month after the average petrol price moved up 5.5% in the month to Rs396.06 a litre, 48.3% higher than a year earlier. Housing costs are also expected to firm on higher electricity bills and liquefied petroleum gas (LPG) prices, with LPG projected up about 6.2% month-on-month.
The food index is forecast to rise roughly 0.25% to 0.30% month-on-month, reflecting estimated increases of about 10% in wheat, 14% in chicken, 11% in pulse gram and 5% in garlic. Malik said real interest rates—policy rates after adjusting for inflation—turned positive again in June 2026 and are projected at about 1.5% in October, up from 1.2% in September. He expects the inflation rate in Pakistan to stay in a 9% to 10% band until March 2027 if average fuel prices remain between Rs390 and Rs400 a litre, with FY27 average inflation seen around 9% to 9.5%.
Separately, the International Monetary Fund (IMF)—the global lender working with Pakistan—has projected inflation of 7.2% for this fiscal year, up from an earlier 6.3% estimate.
Split call on the policy rate
Malik expects the committee to raise the policy rate by 50 to 100 basis points—0.5 to 1 percentage point—on 26 October if fuel prices stay elevated. That interest rate update would be a hawkish response to sticky price pressures even as real rates sit in positive territory.
AKD Securities Director Research Mohammed Awais Ashraf takes the opposite view on the near-term call. He argues that stronger remittances, improving exports, record-high foreign exchange reserves and a contained current account have rebuilt external buffers, while a successful $3 billion Eurobond issue at record-low spreads has backed external stability. A slowdown in large-scale manufacturing and a fall in fuel prices since the previous policy meeting, he wrote, also support keeping rates unchanged.
Ashraf raised his FY27 inflation forecast to 9.1%, citing a higher oil-price assumption of $96.3 a barrel against $72.5 earlier, kept his FY28 forecast at 6%, and moved the assumed start of monetary easing to April 2027 from October 2026 because of prolonged higher oil prices and a larger-than-expected rise in wheat prices. Dubai crude has fallen 15.5% since the previous meeting, from $127 to $107 a barrel, though regional security risks and inventory trends still support prices. He sees real interest rates averaging about 3.4% over the next 12 months if the rupee depreciates normally and oil prices ease gradually through February 2028.
Timeline: what has happened so far
- June 2026: Real interest rates returned to positive territory, Growth Securities said.
- Since the previous MPC meeting: Dubai crude fell from $127 to $107 a barrel (about 15.5%); fuel prices also declined in that interval, AKD noted.
- September–October 2026: Real rates are projected at about 1.2% then 1.5%; October headline inflation is forecast near 10%.
- 26 October 2026: The SBP Monetary Policy Committee meets, with Growth leaning to a 50–100 bps hike and AKD to a hold.
- Through March 2027: Growth sees inflation in a 9–10% range if fuel averages Rs390–400 a litre.
- April 2027 / FY28: AKD now assumes easing starts in April 2027 and keeps FY28 inflation at 6%.
Aasan alfaaz mein
October mein Pakistan ki mehengai lagbhag 10 percent tak jaane ka imkaan hai, petrol, bijli aur khane ki cheezon ki wajah se. Petrol ka average rate lagbhag Rs396 litre bataya ja raha hai, aur gehun, murghi aur daal jaise items mehengay ho sakte hain. Central bank 26 October ko interest rate par faisla karegi—kuch logon ke mutabiq rate barhegi, kuch ke mutabiq same rahegi. Aam logon ke liye yeh matlab hai ke fuel aur kitchen ka kharcha pehle se zyada mehnga mehsoos ho sakta hai jab tak prices settle na hon.
