Pakistan's inflation expected to be in 10.75-11.25% range for August— report

ISLAMABAD: Pakistan's Consumer Price Index (CPI) inflation for August 2026 is expected to rise to 10.75 to 11.25 percent year-on-year (YoY), brokerage firm Topline Securities said on Monday. Pakistan's CPI inflation was recorded at 9.2 percent YoY in July, as per data from the statistics bureau. Pakistan's CPI in August 2025 was recorded at 2.99 percent. 'On a month-on-month (MoM) basis, inflation is projected at 1.06 percent, primarily driven by a 1.82 percent increase in food prices and an estimated 3 percent rise in the transport segment, largely attributable to higher fuel prices,' the report added. Fighting between the United States and Iran since February this year have rattled global fuel markets. Disruptions in global maritime trade routes such as the Strait of Hormuz have constrained fuel supplies, causing oil prices to surge and inflation to increase worldwide. Topline said food inflation is expected to increase by 1.82 percent MoM, primarily driven by higher prices of onions, eggs, pulse gram and wheat. The report said that Pakistan's transport segment is expected to witness a rise in prices amid higher international oil prices and increased dealer margins. 'As fuel prices are now calculated on a weighted average basis through the last day of the month, we assume motor fuel prices to contribute 5 percent to the increase in the transport index,' it said. The brokerage firm said housing, water, electricity and gas is expected to rise by 0.17 percent MoM in August, primarily driven by a 1.05 percent MoM increase in electricity charges. The report added that with inflation expected to clock in at 10.75–11.25 percent this month, real interest rates are likely to be between 25–75 basis points, below Pakistan's historic average of 200–300 basis points.