Pakistan’s Consumer Price Index (CPI) for Sep 2025 is expected to clock in at 6.5–7% YoY vs. 3.0% in Aug 2025 and 6.93% in Sep 2024. On a MoM basis, inflation for Sep 2025 is projected at +3.1%. YoY inflation reading is likely to be the highest after 11 months, while the 3.1% MoM rise is the highest in 26 months. The resurgence in food inflation is primarily on the back of the supply side effects on food products due to the ongoing floods in the country.

§  The MoM increase was driven by an expected rise of 8.75% in the food segment, likely to be all time high MoM increase.

§  Key contributors to the monthly inflation are tomatoes (+122%), wheat (+49%), wheat flour (+39%), and onions (+35%). Meanwhile, potatoes rose 5.4%, rice 4.3%, chicken 4.1%, eggs 3.5%, and sugar 2.7%. However, fruits are likely to remain flattish, while vegetable prices would be down by ~10% MoM.

§  The housing, water, electricity, and gas category is expected to fall by 0.24% MoM in Sep due to a 2.19% MoM decline in electricity charges – Quarterly Tariff Adjustment (QTA) of Rs-1.8881/kWh for Aug–Oct and Fuel Charges Adjustment (FCA) of Rs-1.7856/kWh (vs. Rs-0.7772/kWh in Aug 2025). The decline in electricity was partly offset by a 2.75% rise in Liquefied Petroleum Gas (LPG).

§  The transport segment is expected to fall by 1.25% MoM, mainly due to a 2.7% decline in motor fuels – with petrol remaining flat while high-speed diesel (HSD) dropped 5.3%.

§  Real Rate in Sep 2025: With inflation expectations of 6.5-7.0% for Sep 2025, real rates will surge to 400-450bps, higher than Pakistan’s historic average of 200-300bps.

§  Key Risks: A significant shift in global commodity prices remains a major variable that could alter the inflation trajectory moving forward.

Courtesy- Topline Pakistan Research