Inflation in Pakistan is expected to slow to 10.75 percent in September, according to a Topline Securities report, though analysts warn that uncertainty surrounding the ongoing Gulf war could keep price pressures elevated. The report projects the Consumer Price Index (CPI) for September to rise 10.25-10.75 percent year-on-year, down from 11.1 percent in August 2026. This modest easing comes after headline inflation rose sharply to 11.1 percent in August, up from 9.2 percent in July 2026.
The financial sector expects oil prices to remain between $90 and $100 per barrel during the remaining days of September and in October. However, the situation changed after US President Donald Trump announced on Saturday that he had rejected Iran’s proposal for the Gulf war. Iran is now anticipating possible attacks from the US, raising concerns that oil prices could surge. Analysts expect oil prices to remain around $100 per barrel if the war resumes, though much will depend on the availability of oil supplies in the international market.
Pakistan imports 70 percent of its oil and gas requirements, making inflation highly sensitive to oil prices. Stakeholders believe oil prices will hover around $100 per barrel. Petroleum prices have been rising daily in Pakistan and have now reached the highest level in the region. India increased petrol prices by 10 percent, while Bangladesh reportedly jacked up prices by 16 percent and Pakistan by over 50 percent.
“It is not easy to assess the exact inflation figure for September as oil prices have been changing both internationally and locally. We can only expect slightly lower inflation, with a fear that it may remain close to last month’s level,” said S.S. Iqbal, a money market expert.
With inflation in Pakistan expected to remain at 10.25-10.75 percent in September 2026, real interest rates are likely to stand at 75-125 basis points, lower than Pakistan’s historical average of 200-300 basis points, according to the Topline report.
The projected slowdown in inflation in Pakistan offers little comfort as volatile oil prices and global tensions continue to pose significant risks to the country’s economic stability.
Source: Dawn News