ISLAMABAD (Nov 4): Pakistan’s inflation rose for the second consecutive month in October, reaching 6.2 per cent year-on-year, driven by higher prices of non-food and non-energy goods and renewed supply shocks caused by floods and border disruptions.
According to data released by the Pakistan Bureau of Statistics (PBS) on Monday, the increase aligns with both government and market projections, marking a reversal after months of relative easing.
Urban inflation rose by 6 per cent, while rural inflation accelerated to 6.6 per cent, reflecting sharper price pressures outside major cities.
Core inflation — which excludes volatile food and energy components — also continued to edge higher, suggesting persistent underlying pressures. In urban areas, it climbed from 7 per cent to 7.5 per cent, and in rural regions, from 7.8 per cent to 8.4 per cent, according to PBS data cited by The Express Tribune.
Economists warned that these trends indicate inflationary momentum could persist in the coming months. The World Bank recently revised Pakistan’s inflation outlook for the ongoing fiscal year to 7.2 per cent, slightly above the official target.
The State Bank of Pakistan (SBP) maintained its benchmark interest rate at 11 per cent, despite inflation being well below that level, arguing that flood-related shocks and exchange rate instability could push prices up again before easing later in the fiscal year.
Finance Minister Muhammad Aurangzeb said the monetary policy was “moving in the right direction” and voiced optimism for rate reductions ahead. However, business leaders have urged the government to cut borrowing costs to revive growth.
Pakistan has allocated PKR 8.2 trillion for interest payments this year — its single largest expenditure — though Finance Secretary Imdad Ullah Bosal said improved debt management may lower actual outlays. The SBP, meanwhile, warned that the government’s 4.2 per cent growth target for the year may be missed.
Food prices soar amid border closure
Food inflation also surged, rising to 4.5 per cent in cities and 6.8 per cent in villages, with non-perishable food items — nearly 30 per cent of the inflation basket — up 6.2 per cent on average.
Flood damage and the temporary closure of the Pakistan-Afghanistan border led to supply shortages that pushed tomato prices up by 127 per cent, sugar by 35 per cent, and wheat and flour prices significantly higher. Onion and chicken prices, however, dropped.
Gas tariffs jumped 23 per cent year-on-year, while electricity prices fell by 16 per cent, according to PBS. Power Minister Sardar Awais Leghari said the fall in power rates — down PKR 10.3 per unit from last year — was the result of renegotiated energy contracts and improved efficiency.