Urdu Report Desk
Pakistan’s inflation is expected to ease slightly in September despite continued uncertainty linked to the ongoing Gulf conflict. Analysts and market participants expect annual consumer inflation to remain between 10.25% and 10.75%.
Topline Securities has projected September inflation at 10.25-10.75% year-on-year, compared with 11.1% in August. The forecast indicates a modest decline rather than a significant easing.
Oil Prices Remain a Key Risk
The financial sector expects international crude oil prices to remain between $90 and $100 per barrel during the remainder of September and in October.
However, uncertainty has increased following US President Donald Trump’s rejection of Iran’s proposal on Saturday. Concerns over possible further attacks could push international oil prices higher.
Analysts expect crude oil prices to remain around $100 per barrel if the conflict resumes, although the eventual price will depend heavily on the availability of supplies in international markets.
Pakistan imports around 70% of its oil and gas requirements, making domestic inflation particularly sensitive to movements in international energy prices.
August Inflation Rose to 11.1%
According to official data from the Pakistan Bureau of Statistics, headline inflation measured by the Consumer Price Index rose to 11.1% year-on-year in August 2026, compared with 9.2% in July.
Topline Securities expects September inflation to remain below the August level, although the forecast suggests that price pressures will continue to be significant.
Petroleum Prices Add to Inflationary Pressure
Petroleum prices have continued to rise in Pakistan, adding to pressure on household and business costs.
According to the supplied report, petrol prices increased by 10% in India, around 16% in Bangladesh and more than 50% in Pakistan.
Money market expert S.S. Iqbal said it was difficult to determine the exact September inflation figure because oil prices have been changing both internationally and locally.
He said only a modest decline could currently be expected, while there was also a possibility that inflation could remain close to the previous month’s level.
Real Interest Rates
According to Topline Securities, if September inflation remains between 10.25% and 10.75%, real interest rates are expected to stand at around 75-125 basis points.
The projected level would be below Pakistan’s historical average of around 200-300 basis points.
Electricity and Food Costs
Electricity, housing, food and construction costs have also increased, raising the possibility that September inflation could exceed some analysts’ expectations.
The risk could become greater if the Gulf conflict continues for an extended period and keeps global energy prices elevated.
Oil Supply Risks
Pakistan, Türkiye and Saudi Arabia are preparing for a possible new conflict involving the Houthis and Saudi Arabia, adding to uncertainty surrounding oil prices and global supplies.
Any disruption to oil supplies could directly affect Pakistan’s economy and increase inflationary pressures.
Foreign Exchange Reserves
Pakistan’s foreign exchange reserves currently exceed $21.4 billion and could provide some cushion against higher oil import costs.
However, higher reserves cannot fully shield the economy from inflationary pressures if the conflict continues and international energy prices remain elevated.
