Pakistan’s CPI to Hit 6.5%–7% in September

Pakistan’s Consumer Price Index (CPI) for September 2025 is forecasted to climb to 6.5%–7% on a year-on-year (YoY) basis, propelled by soaring food prices triggered by supply-side disruptions from ongoing floods, according to Topline Securities’ latest report.

This represents a leap from 3.0% in August 2025 and 6.93% in September 2024. On a month-on-month (MoM) basis, inflation is projected to surge by 3.1%, the steepest rise in 26 months.

The YoY inflation for September 2025 is anticipated to be the highest in 11 months, with the 3.1% MoM increase largely driven by an unprecedented 8.75% spike in food prices, setting a record for monthly food inflation.

Key contributors include tomatoes, skyrocketing by 122%, wheat surging 49%, and wheat flour escalating 39%. Other food items fueling the inflation spike include onions (+35%), potatoes (+5.4%), rice (+4.3%), chicken (+4.1%), eggs (+3.5%), and sugar (+2.7%).

Conversely, fruit prices are expected to remain stable, while vegetable prices are projected to drop by approximately 10% MoM.

The housing, water, electricity, and gas category is set to decline by 0.24% MoM, primarily due to a 2.19% reduction in electricity charges stemming from the Quarterly Tariff Adjustment (QTA) and Fuel Charges Adjustment (FCA) for August–October. This was partially offset by a 2.75% rise in Liquefied Petroleum Gas (LPG) prices.

The transport sector is expected to decrease by 1.25% MoM, driven by a 2.7% drop in motor fuel prices, including a 5.3% decline in high-speed diesel (HSD), while petrol prices held steady.

With September 2025 inflation projected at 6.5%–7.0%, real interest rates are anticipated to soar to 400–450 basis points (bps), far exceeding Pakistan’s historical average of 200–300 bps.

The brokerage firm warned that a major risk to the inflation outlook lies in potential fluctuations in global commodity prices, which could sway inflation in the coming months.