Pakistan projects Oct inflation at 5–6% amid flood impacts

Pakistan’s Finance Division has projected consumer inflation in October to remain within a 5–6% range, noting that overall macroeconomic fundamentals have improved but warning of persistent price pressures tied to recent floods and temporary border closures. September inflation stood at 5.6%, down from 6.9% a year earlier, while CPI averaged 4.2% in July–September of FY26 versus 9.2% in the same period last year. The report estimates flood-related losses at roughly Rs430 billion, with agriculture taking the brunt across major crops. Signs of recovery include a 19.5% jump in agricultural credit disbursement to Rs404.2 billion in the first quarter and a 31.3% rise in farm-machinery imports to $39.3 million. On the fiscal and external sides, the federal government recorded a Rs1.5 trillion surplus in the first quarter. Exports increased 6.5% to $7.9 billion and remittances rose 8.4% to $9.5 billion. The division underscored that the recent staff-level agreement with the IMF underscores policy commitment as authorities work toward securing a $1.24 billion tranche.