Pakistan’s Inflation Projected to Rise Amid Surging Food and Energy Prices

KARACHI: Pakistan’s inflation rate is anticipated to register an increase in October 2025, driven primarily by rising food and energy costs, according to projections from JS Global. The Consumer Price Index (CPI) is expected to range between 5.25% and 5.75% year-on-year for the month, a slight decrease from 5.61% in September 2025, but lower compared to 7.17% recorded in October 2024.

On a month-to-month basis, inflation for September 2025 is projected at a 1.1% increase, influenced by higher housing, water, electricity, and gas expenses, which are expected to rise by 1.95%. This surge is largely attributed to a 4.13% increase in electricity charges due to a Quarterly Tariff Adjustment and a Fuel Charges Adjustment.

Additionally, a quarterly rent adjustment is estimated to rise by 1.7%, alongside a 2.05% increase in Liquefied Petroleum Gas and a 0.93% rise in solid fuel costs.

The food sector is anticipated to witness a 1.21% month-on-month increase, fueled by supply chain disruptions from recent floods and the closure of the Afghan border. Significant contributors to this rise include tomatoes, fresh vegetables, and onions, which are expected to increase by 27%, 25%, and 10%, respectively. Conversely, fresh fruits and chicken are projected to decrease by 10% and 25%.

The transportation sector is also expected to see a 1.12% month-on-month increase, primarily due to a 2.1% rise in motor fuels. Petrol prices are forecasted to increase by 1.7%, while high-speed diesel could rise by 2.5%.

With these inflation expectations, Pakistan’s real interest rates for October 2025 may rise to between 525 and 575 basis points, surpassing the country’s historical average of 200 to 300 basis points.

However, significant shifts in global commodity prices could pose risks to these projections, potentially altering the inflation trajectory in the upcoming months.