Pakistan’s annual inflation rate fell to 9.61 per cent in October 2026, returning to single digits after two months above 10 per cent, according to data released by the Pakistan Bureau of Statistics. The figure marks the first single-digit annual reading since July, offering some relief after a summer in which price pressures had picked up again.
The bureau’s monthly report showed the annual rate easing from 10.3 per cent in September to 9.61 per cent in October. Inflation had climbed above 10 per cent in August and stayed there in September, so the October decline breaks that run, even though the rate remains well above the State Bank’s target range of 5 to 7 per cent. For households, the direction of travel matters, but the level still means prices are rising much faster than policymakers would like.
The improvement in the annual rate did not mean prices stopped rising. Consumer prices increased by 1.1 per cent in October compared with September, showing that month-on-month pressures continued. Rural areas felt that monthly increase more sharply, with prices up 1.5 per cent on the month, against 0.8 per cent in urban areas. On an annual basis, rural inflation stood at about 9.8 per cent in October, compared with 9.5 per cent in urban areas.
The broader picture for the fiscal year remains less comfortable. Average inflation during the first four months of the current fiscal year, from July to October 2026, remained in double digits at 10.05 per cent. That average reflects the higher readings in August and September, and it shows that a single month of cooling does not by itself undo the pressure built up over the summer.
Food provided some of the relief in October. Food inflation eased to 7.74 per cent from 8.2 per cent in September, helped by a fall in perishable food prices, which dropped 2.35 per cent on the month after a sharp rise the month before. At the same time, price growth in transport quickened further, reaching 28.61 per cent from 27.43 per cent, a reminder that energy and fuel costs continue to feed through to household budgets.
The comparison with a year ago underlines how much has changed. Inflation in October 2026, at 9.61 per cent, was considerably higher than the 6.2 per cent recorded in October 2025. The Finance Division had projected October inflation in a range of 9.5 to 10.5 per cent, so the official figure landed comfortably inside that forecast, but at a level far above last year’s.
What happens next will depend heavily on international energy prices, food supplies and base effects, the factors the Finance Division itself flagged as risks to the outlook. The State Bank raised its policy rate to 12 per cent in late October to guard against second-round price effects, a move that raises borrowing costs but is intended to anchor expectations.
For now, October’s data gives the government a welcome headline: inflation back in single digits. Whether that becomes a sustained trend, rather than a one-month pause, will be decided by the November figures and by whether the monthly price increases that continued in October begin to fade.
