Consensus puts September inflation at 10.22%

September 29, 2026 (MLN): Pakistan’s headline inflation for September 2026 is set to ease modestly from August’s reading, according to a consensus of 13 brokerage house estimates compiled by Mettis Global, even as escalating Middle East supply disruptions and domestic energy tariff revisions keep sequential momentum elevated.

The average of forecasts from leading brokerage houses puts September Consumer Price Index (CPI) inflation at 10.22% YoY, with a median estimate of 10.20% YoY, slowing from August’s 11.1% YoY print.

Analysts attribute the annual deceleration primarily to statistical dampening from a high prior-year base effect, which is expected to persist through November 2026.

On a sequential basis, brokerages project continued price pressure, with the average MoM change estimated at 1.11% (median: 1.10% MoM).

The estimates reveal a sharp underlying divergence across the basket: severe hikes in transport, petroleum, and electricity charges are pushing indices higher, while a broad-based cooling in perishable food items is acting as a crucial deflationary buffer.

Brokerage-Wise Estimates

Topline Securities, whose 10.25–10.75% YoY range sits at the upper end of the surveyed estimates, expects sequential momentum to clock in at 1.30% MoM, largely driven by a 6.5% MoM jump in retail fuel prices and a 1.78% rise in the housing segment.

The brokerage noted that electricity prices rose 9.58% MoM due to a higher Fuel Charges Adjustment (FCA) of PKR 2.06/kWh (versus PKR 0.75/kWh in August) alongside a positive Quarterly Tariff Adjustment (QTA) of PKR 0.52/unit.

Topline estimates implied real interest rates in September to settle between +75bps and +125bps, staying below Pakistan’s historical average of 200–300bps.

Sherman Securities, projecting headline inflation at 10.4% YoY and a steep 1.3% MoM rise, flagged that the closure of the Strait of Hormuz and Bab-el-Mandeb amid escalating Middle East conflict continues to cause severe energy supply disruptions.

It also projects the housing index to climb 2.9% MoM on a 16% MoM surge in electricity charges following a Fuel Charges Adjustment (FCA) of PKR 2.06/kWh (up from PKR 0.75 in August) and a positive Quarterly Tariff Adjustment (QTA) of PKR 0.52/unit.

Ismail Iqbal Securities, projecting headline inflation at 10.5% YoY (+1.4% MoM), highlighted a structural shift in the inflation drivers. While food accounted for nearly half of August's inflation, energy is driving September's index, with housing (+12.6% MoM in electricity) adding 55bps and transport (+7.3% MoM in motor fuels) contributing another 35bps.

The brokerage warned that while food spikes reverse quickly, energy shocks tend to persist and pass through into transport fares, freight, and core inflation. Projecting NFNE core inflation steady at 8.7% YoY, the brokerage expects the SBP to maintain a prolonged policy hold at 11.5% through the end of CY26.

Optimus Capital Management pegged CPI at 10.4% YoY (+1.2% MoM), noting that while international oil and expensive spot LNG cargoes pushed energy inflation up 6.7% MoM, the domestic food index provided a critical -0.4% MoM deflationary buffer. Sharp drops across tomatoes (-25% MoM), fresh fruits, potatoes, and poultry (chicken -8.3% MoM) fully absorbed increases in heavyweight staples like fresh milk (+0.1%) and wheat (+1.5%).

What the SBP Itself Is Watching

The brokerage consensus aligns closely with the State Bank of Pakistan’s assessment from its September 14 Monetary Policy Committee (MPC) meeting, where the Committee voted 7–3 to keep the policy rate unchanged at 11.5%, judging the current stance appropriate to steer inflation back toward the 5–7% medium-term target by June 2027.

The MPC noted that while domestic macroeconomic data broadly matched earlier expectations, the intensification of the Middle East conflict has reignited global commodity volatility, prolonged supply chain bottlenecks, and pushed headline inflation up from 9.2% in July to 11.1% in August.

Key macroeconomic developments highlighted by the central bank include:

External & Sovereign Buffers: Moody’s upgraded Pakistan’s sovereign rating to B3 (Stable outlook), while a $3bn Eurobond issuance combined with sustained FX purchases pushed SBP liquid reserves above $21.4bn. The current account deficit is projected to remain contained within 0–1% of GDP for FY27, supported by robust remittances targeting $44bn.

Fiscal Consolidation: Fiscal consolidation outpaced targets in FY26 due to contained debt servicing costs. A higher-than-budgeted SBP profit transfer of PKR 1.9tr (versus PKR 1.4tr budgeted) has significantly bolstered the FY27 fiscal outlook, while FBR tax collection met its July–August targets.

Real Sector Growth: Real GDP growth for FY27 remains projected at 3.5–4.5%, supported by an early recovery in agriculture (cotton arrivals, increased acreage for rice and sugarcane) and firming private sector credit growth (+13.4% YoY).

The SBP reiterated that while positive real interest rates on a forward-looking basis will keep second-round effects in check, the inflation path remains exposed to upside risks, including volatile global crude prices, the magnitude of power and gas tariff revisions, potential fiscal slippages, and weather uncertainties linked to El Niño conditions.

Headline inflation is set to remain constrained in double digitsbefore entering a clearer downward trajectory early next year. While high prior-year base effects will continue to provide statistical relief over the near term, the index remains highly vulnerable to external geopolitical shocks particularly supply chain bottlenecks across key maritime transit routes.

With forward-looking real interest rates remaining positive, the State Bank of Pakistan is expected to maintain its current policy rate hold, though any persistent second-round pass-through from energy charges into core inflation could quickly bring rate hikes back into active discussion.

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