Pakistan Inflation Seen Above 10% as Food and Fuel Costs Surge

Pakistan’s headline inflation is projected to return to double digits in August 2026 as higher food and transport costs place renewed pressure on household budgets, according to estimates released by major brokerage houses. Forecasts from Ismail Iqbal Securities, Topline Securities and JS Global place year-on-year Consumer Price Index inflation between 10.75% and 11.3%, marking a notable acceleration from the previous month.

Official Pakistan Bureau of Statistics data showed headline inflation at 9.2% year-on-year in July. The August projections therefore indicate that inflation could move back above the 10% threshold after the comparatively lower reading recorded a month earlier. The expected increase is also substantially higher than the 3% inflation rate recorded in the corresponding period last year, reflecting both current price pressures and an unfavourable base effect.

Food prices are expected to be one of the largest drivers of the monthly increase. Topline Securities estimates food inflation could rise by about 1.82% month-on-month, pointing to sharp increases in onions, eggs, pulse gram and wheat. Ismail Iqbal Securities similarly expects food items to account for roughly 70 basis points of the monthly CPI increase, with onions, chicken, eggs, potatoes, pulses and fresh vegetables among the products contributing to the pressure.

Analysts expect some of the food-price increases to ease if supplies normalise, but transport costs are adding another layer of inflationary pressure. Ismail Iqbal Securities estimates that transport could contribute around 20 basis points to inflation following a rise of close to 7% in motor-fuel costs. Topline Securities also expects higher international oil prices and increased petroleum dealer margins to feed through to the transport component of the CPI.

The fuel impact is particularly important for Pakistan because petroleum-price movements affect more than motorists. Higher transportation expenses can raise distribution costs for food, manufactured products and other goods moving through domestic supply chains. Any sustained increase in imported energy costs can therefore broaden inflationary pressures and make it more difficult for households and businesses to absorb price increases.

JS Global expects August CPI inflation to reach about 10.9% and has highlighted renewed geopolitical tensions and disruption risks surrounding critical energy trade routes. Those external uncertainties have also influenced monetary-policy expectations. The State Bank of Pakistan’s Monetary Policy Committee kept the policy rate unchanged at 11.50% at its latest meeting, with external risks weighing against the case for further monetary easing.

The projected return to double-digit inflation will keep attention focused on the Pakistan Bureau of Statistics’ official August CPI release and on how persistent food and energy pressures prove to be in subsequent months. For policymakers, the key issue will be whether current increases are temporary and reverse as supply conditions improve, or whether higher imported fuel costs and geopolitical instability keep inflation elevated. The official data will also be closely watched by businesses, financial markets and households for indications of the State Bank’s future interest-rate direction.