Inflation Rises as Food Prices Surge in Pakistan

Karachi: Pakistan’s Consumer Price Index (CPI) for September 2025 rose to 5.6%, driven primarily by a significant increase in food prices, according to a recent report by JS Global. The rise in food inflation, up 5.0% year-on-year, was largely due to higher prices for wheat and key vegetables. On a month-on-month basis, the index increased by 2%.

Despite a slight easing, core inflation remains high, with urban areas experiencing a rate of 7.0% and rural areas at 7.8% in September 2025. The State Bank of Pakistan (SBP) maintained its interest rates during the last Monetary Policy Committee meeting, citing risks to key macroeconomic estimates due to ongoing floods.

Real interest rates currently stand at approximately 5.4% following the September CPI report. A JS Global survey indicated that investors anticipate a potential policy rate reduction of up to 100 basis points by the end of the fiscal year 2026.