Inflation nearly doubles in Sept, hits 10-month high

ISLAMABAD: Pakistan’s annual inflation jumped to 5.6 per cent in September, nearly double the previous month and the highest in 10 months, as floods disrupted farm supplies and reignited food price pressures, official data showed Wednesday. A year earlier (Sept 2024), inflation stood at 6.93 per cent. The surge was driven by a quick rebound in food prices, which climbed 5.46 per cent year-on-year after dropping into negative territory (-1.79pc) in August. Transport costs accelerated to 4.2pc from 2.5pc a month earlier, while household furnishing and equipment maintenance rose 4.13pc against 3.5pc. Housing and utilities remained steady at 3.65pc, while health charges were stagnant. Clothing and footwear prices eased slightly to 8pc from 8.1pc, and restaurant and hotel rates slowed to 6.1pc from 7.2pc. Recreation and culture saw a deeper contraction, down -2.7pc after a -2.3pc fall. Some essentials recorded sharp monthly increases: tomatoes surged 65pc, wheat 37.6pc, flour 34.4pc, onions 28.5pc, and fresh vegetables 9pc. Potatoes, eggs, butter, sugar, rice, and pulses also climbed. Relief came from poultry and mash pulse, which dropped 5.3pc and 1.2pc respectively.

The State Bank of Pakistan’s key discount rate stands at 11%. Its board meets Oct. 27 to decide whether to ease, tighten, or hold steady. Independent economists argue for a single-digit rate, warning that high borrowing costs strain the budget and fuel debt servicing, which already consumes three-fourths of government revenue. Core inflation—which excludes volatile food and energy prices—also recorded at 7.0pc in September from 6.9pc in August, and was lower than the 9.3pc recorded in September 2024. Urban CPI inflation stood at 5.5pc, while rural areas saw 5.8pc inflation, from 6.9pc and 2.4pc, respectively, in the same month last year. The Wholesale Price Index (WPI) increased 0.6pc in September, as compared to an increase of 1.9 percent in same month of last year.