Pakistan’s single-digit inflation streak is expected to come to an end in August 2026, with consumer price inflation (CPI) projected to rebound toward 11% amid rising food and fuel prices.
Separate estimates from AKD Research and Topline Securities indicate a significant increase from July’s 9.21% inflation reading.
AKD Research has projected headline inflation at 11.4% year-on-year for August 2026, citing increases in food, transport, communication, and clothing prices.
The brokerage expects food inflation to reach 14.8% year-on-year, while transport and housing inflation are projected at 19.6% and 8.4%, respectively. Communication prices are expected to increase by 13.8%.
Clothing, education, and health inflation are forecast at 9.1%, 8.6%, and 7.1%, respectively.
Meanwhile, Topline Securities expects headline inflation to remain between 10.75% and 11.25%, compared with 9.21% in July and 2.99% in August 2025.
AKD expects monthly inflation to increase by 1.3% in August, representing the sharpest month-on-month rise in four months.
The food index is projected to increase by 2.5% due to higher prices of perishable and non-perishable food items amid supply-chain disruptions caused by monsoon weather and the transporters’ strike.
Wheat and wheat flour prices are expected to increase by 6.3% and 2.7%, respectively.
Onion prices are projected to surge 59.5% month-on-month, while egg and gram pulse prices could rise by 8.3% and 8.1%. Tomato and moong pulse prices, however, are expected to decline.
Topline Securities has also projected monthly inflation at 1.06%, with food prices expected to rise 1.82%.
Transport costs are also expected to put upward pressure on overall inflation.
AKD projects the transport index to increase 2.9% month-on-month, mainly due to higher Motor Spirit and High-Speed Diesel prices.
Motor Spirit prices are expected to rise 3.6%, while High-Speed Diesel prices could increase by 15.3%.
Topline Securities also expects transport inflation to increase, citing higher international oil prices and increased dealer margins.
With inflation expected to remain between 10.75% and 11.25%, Topline estimates that Pakistan’s real interest rates could fall to between 25 and 75 basis points.
This would be significantly below the country’s historical average of around 200 to 300 basis points.
The latest inflation projections suggest that rising food and energy costs could put renewed pressure on household budgets while also narrowing the gap between interest rates and consumer price inflation.
