KARACHI: Pakistan’s annual inflation rate slowed to 9.61% in October but came in above analyst expectations, according to data released Monday.
The consumer price index rose 9.61% from a year earlier, down from 10.26% in September. The reading was higher than the 9.5% median estimate in a Bloomberg survey. In October 2025, inflation stood at 6.25%.
Core inflation, which excludes volatile food and energy prices, was 7.8% in October, down from 8.6% in September. A year earlier, core inflation was 7.5%.
For the first four months of the 2027 fiscal year, which began in July, consumer prices rose an average of 10.05% from the same period a year earlier. That compares with an average increase of 4.79% in the first four months of the previous fiscal year.
The State Bank of Pakistan (SBP) last week raised the key policy rate by 50 basis points to 12 per cent, its first increase since April as inflation, fuelled by high energy costs due to the Gulf conflict, remained above target.
The committee said the intensification of the Middle East conflict and low prospects of a near-term resolution were keeping global energy prices persistently elevated.
“While the impact of this global shock on the domestic economy has remained contained so far amidst proactive monetary policy adjustment and continued fiscal discipline, geopolitical developments have worsened the inflation outlook as compared to the earlier assessment,” the MPC said.
It added that although the external account and growth outlook remained broadly unchanged, risks had increased.
“Considering these developments and the evolving risks, the MPC deemed today’s decision as necessary to keep inflation expectations anchored, contain second-round effects of the ongoing supply shock and bring inflation within the target range of 5-7%. This will help preserve macroeconomic stability, which is necessary for sustainable economic growth,” the committee said.
The MPC said foreign exchange reserves had remained stable at about $21 billion, Pakistan had reached a staff-level agreement with the International Monetary Fund, and real gross domestic product growth had been revised to 3.7%, almost unchanged from the initial estimate.
