Topline Securities expects September CPI inflation at 10.25-10.75%, driven mainly by higher fuel and electricity prices.
KARACHI: Pakistan’s headline inflation, measured by the Consumer Price Index (CPI), is expected to reach 10.25-10.75% year-on-year (YoY) in September 2026, according to a report by Topline Securities Limited.
The projected inflation rate compares with 11.15% in August 2026 and 5.61% in September 2025. The official Pakistan Bureau of Statistics (PBS) reported August CPI inflation at 11.15% YoY and 1.19% month-on-month (MoM).
On a monthly basis, Topline Securities expects inflation to increase by 1.30% in September, primarily because of higher fuel prices and increases in housing and utility costs.
Fuel and Electricity Prices Drive Inflation
According to the brokerage’s assessment, fuel prices are expected to increase by 6.5% MoM during September, while the Housing, Water, Electricity and Gas segment is projected to rise by 1.78%.
Within the housing and utilities category, electricity prices increased by 9.58% MoM, while Liquefied Petroleum Gas (LPG) prices rose by 2.61%.
The increase in electricity charges has been attributed mainly to a higher Fuel Charges Adjustment (FCA) of Rs2.0581 per kilowatt-hour (kWh), compared with Rs0.7503 per kWh in August.
The impact was further amplified by a positive Quarterly Tariff Adjustment (QTA) of Rs0.5194 per kWh, compared with a negative adjustment of Rs1.9857 per kWh for the June-August 2026 quarter.
Food Inflation Also Expected to Rise
Food inflation is projected to increase by 0.81% MoM in September, mainly due to higher prices of onions and fresh vegetables.
Onion prices increased by around 35%, while fresh vegetable prices rose by approximately 7%.
The increases were partly offset by lower prices of tomatoes and eggs, which declined by around 25% and 6%, respectively.
The latest official PBS data show that food and other consumer-price movements are being tracked through the national CPI, which covers urban and rural markets across Pakistan.
Real Interest Rate Outlook
With September headline inflation projected at between 10.25% and 10.75%, real interest rates are expected to remain around 75-125 basis points, according to Topline Securities.
The projected real interest rate would remain below Pakistan’s historical average of around 200-300 basis points, based on the brokerage’s assessment.
The inflation projection comes as the PBS continues to report elevated price pressures. Its latest available official data showed the Sensitive Price Indicator (SPI) rising 0.49% week-on-week for the week ended September 17, 2026.
FY27 Inflation Forecast Revised Higher
Topline Securities expects average inflation to remain above 8.5% during FY2026-27, compared with its earlier forecast range of 8.0-8.5%.
The brokerage said its revised outlook is subject to international oil prices remaining between US$90 and US$100 per barrel.
Higher global oil prices could place additional pressure on domestic fuel costs and, in turn, transport and other consumer prices.
The projection was highlighted in Topline Securities’ Monetary Policy Survey released on September 8, 2026, which examined the potential impact of elevated oil prices and other macroeconomic factors on Pakistan’s inflation and monetary policy outlook.
The September inflation figure will ultimately be determined by the Pakistan Bureau of Statistics, which is responsible for compiling and releasing the country’s official CPI data.