- August 24, 2026
- Posted by: Tresmark
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Pakistan’s headline inflation is projected to accelerate to around 11% year-on-year in August 2026, mainly driven by rising food and fuel prices, according to a forecast by Growth Securities.
The National Consumer Price Index (NCPI) is expected to increase 1.0% month-on-month in August, reversing the 0.6% decline recorded during the same month last year. The projected annual inflation rate would also mark a sharp increase from the 3.0% recorded in August 2025.
Growth Securities said the expected inflation reading is above the government’s 8.2% average target for FY2027, pointing to renewed price pressures early in the fiscal year.
Food Prices Drive Inflation
Food prices are estimated to increase around 0.7% month-on-month, with seasonal supply pressures pushing up several essential commodities.
Wheat prices are estimated to have risen about 3% during August, while chicken and gram prices increased by approximately 9% and 8%, respectively. Onions recorded the steepest increase, with prices jumping nearly 68% month-on-month.
Fuel Costs Add Pressure
Higher petroleum prices are also expected to contribute to the inflationary increase. Average petrol prices rose 7.6% to Rs339.33 per litre, while high-speed diesel (HSD) prices increased 6.7% to Rs364.90 per litre.
The rise in fuel costs is expected to increase transportation expenses directly and put additional pressure on the prices of goods and services through higher logistics costs.
The housing component could provide some relief, with electricity charges estimated to decline 7.3% during the month. However, LPG prices increased 1.2%, adding modestly to overall inflation.
SBP Rate Seen Unchanged
Inflation is expected to remain elevated in the near term before gradually easing. Growth Securities projects CPI inflation at 9–10% in September and October, while average inflation for FY2027 is forecast at 8–9%.
With real interest rates remaining positive and expected to reach around 0.5% in August, the outlook is likely to support a cautious monetary policy stance.
The State Bank of Pakistan’s Monetary Policy Committee is therefore expected to keep the policy rate unchanged at 11.5% at its September 14, 2026 meeting.
While August could mark a renewed inflationary spike, the broader FY2027 outlook is expected to moderate. However, inflation is still projected to remain above the government’s 8.2% target, limiting room for near-term monetary easing.
