Karachi: Pakistan's inflation rate is projected to moderate in September 2026, with an expected Consumer Price Index (CPI) increase of 10.25% to 10.75% year-over-year. This marks a slight decline from August 2026 when inflation was recorded at 11.15%, though it remains significantly higher than the 5.61% recorded in September 2025.

According to JS Global, the monthly inflation rate is anticipated to rise by 1.30%, primarily due to a 6.5% surge in fuel prices and a 1.78% increase in the housing, water, electricity, and gas sector. Electricity prices have seen a marked rise, increasing by 9.58% month-over-month, while Liquefied Petroleum Gas (LPG) prices have climbed by 2.61%.

The increase in electricity costs is attributed to a higher Fuel Charges Adjustment (FCA) of Rs2.0581 per kWh, compared to Rs0.7503 per kWh in August 2026, along with a positive Quarterly Tariff Adjustment (QTA) of Rs0.5194 per kWh, which was negative at Rs1.9857 per kWh during the June to August 2026 period.

Food inflation is also expected to rise by 0.81% month-over-month, driven by significant price increases in onions, which rose by 35%, and fresh vegetables, which increased by 7%. These were partially offset by declines in the prices of tomatoes and eggs, which fell by 25% and 6%, respectively.

With inflation expectations set at 10.25% to 10.75% for September 2026, real interest rates are likely to be between 75 to 125 basis points, lower than Pakistan's historical average of 200 to 300 basis points. Looking ahead, inflation is expected to average above 8.5% for the fiscal year 2027 if oil prices remain within the US$90-100 per barrel range, as outlined in JS Global's Monetary Policy Survey released on September 8, 2026.