Pakistan’s Annual Inflation Slows to 9.61% in October as Prices Rise Monthly
Key Facts
Pakistan’s annual inflation slowed to 9.61% in October 2026, while the national consumer price index rose 1.08% from September, the Pakistan Bureau of Statistics said. The annual reading was above the median estimate of 9.5% in a Bloomberg survey, as reported by Bol News. Annual urban inflation fell to 9.5% from 10.1% in September, while rural inflation declined to 9.8% from 10.5%. Rural inflation nevertheless remained higher than urban inflation during the month. The data show that the annual slowdown coincided with a monthly increase in prices.
On a year-over-year basis, inflation remained higher than a year earlier in both urban and rural areas. Urban inflation was 9.5% in October, compared with 6.0% in the same month of 2025, while rural inflation reached 9.8%, versus 6.6%. Both readings were down from their levels in September 2026, when they stood at 10.1% and 10.5%, respectively. This means the pace of annual price increases eased during the month but remained above its level a year earlier. Average national inflation in the first four months of fiscal year 2026-2027 was 10.05%, compared with 4.79% in the same period of the previous fiscal year.
Core inflation, which measures prices excluding food and energy, also eased, with different readings in urban and rural areas. Urban core inflation fell to 7.8% in October from 8.6% in September, while rural core inflation declined to 7.1% from 8.1%. Wholesale prices moved in the opposite direction: annual inflation rose to 13.8% from 13.3% in September, according to the statistics bureau. The weekly SPI index also showed annual inflation at 8.7%, compared with 8.4% in September and 4.8% in October 2025. The index rose 1.3% month over month in October.
Food and non-alcoholic beverage prices rose 2.26% in October, contributing 0.81 percentage point to the monthly increase in the consumer price index. Within the food basket, chicken prices rose 19.38% during the month, while wheat prices increased 9.01% and wheat flour prices rose 7.54%. Tomato prices, by contrast, fell 31.63%. These moves show diverging changes in food commodity prices during the month, as the national index rose 1.08% from September. Food’s contribution also highlights its role in the monthly increase in the index.
The State Bank of Pakistan raised its policy rate by 50 basis points to 12%, effective October 27, in a decision passed by 9 votes out of 10 on the Monetary Policy Committee. The committee said geopolitical developments had worsened the inflation outlook compared with its previous estimates, while the impact of the global shock on the domestic economy remained “limited so far” amid monetary policy adjustments and fiscal discipline. It linked persistently high global energy prices to escalating conflict in the Middle East and diminishing prospects for a near-term resolution. The committee added that the rate increase was necessary to anchor inflation expectations, contain second-round effects of the supply shock and return inflation to the target range of 5% to 7%. In its monetary policy statement, the bank said foreign exchange reserves remained stable at about $21 billion and its real GDP growth forecast was revised to 3.7% for fiscal year 2026-2027.