Pakistan’s CPI seen returning to double digits in August as food, fuel costs surge

Pakistan’s headline inflation is expected to return to double digits in August, with food and transport costs driving the monthly increase, say analysts.

Inflation is projected at between 10.75%-11.3% year-on-year in August, up from 9.21% in July, according to estimates from Ismail Iqbal Securities, Topline Securities and JS Global. The readings would mark a sharp increase from the 3% recorded a year earlier, reflecting both higher prices and an unfavourable base effect.

Pakistan’s headline inflation clocked in at 9.2% on a year-on-year (YoY) basis in July 2026, according to Pakistan Bureau of Statistics (PBS) data.

On a monthly basis, Ismail Iqbal Securities estimates a 1.2% month-on-month rise, while Topline projects 1.06% in August.

“Food inflation is expected to increase by 1.82% MoM, primarily driven by higher prices of onions (+48%), eggs (+10%), pulse gram ( +7%) and wheat (+6%),” said Topline Securities.

Similarly, Ismail Iqbal Securities expects the food component to account for about 70 basis points of the monthly CPI increase, citing onions, chicken, eggs, potatoes, pulses and fresh vegetables. “Most of this should reverse as supply normalises,” said the brokerage house.

Transport costs are also expected to provide another significant push to inflation.

“Transport adds a further 20bps on a close to 7% rise in motor fuel, the reversal we flagged last month when the late July revision in ex-depot prices came too late to land in the July index,” said Ismail Iqbal.

Similarly, Topline estimates transport 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% to the increase in the transport index,” said the brokerage house.

Meanwhile, JS Global, which expects CPI to clock in at 10.9% in August, noted that renewed geopolitical flare-ups and disruptions to critical energy trade routes elevated global uncertainty, resulting in a cautious stance by the SBP.

“With external risks outweighing the case for further easing, MPC kept the policy rate unchanged at 11.50% in the last meeting.

“To assess downside risks to our baseline inflation outlook for FY27, we present an alternative scenario assuming prolonged geopolitical tensions in the Middle East. Under this scenario, higher imported energy costs could temporarily lift Pakistan’s inflation trajectory to 9%, before stabilising at ~8%,” said the brokerage house.