10% inflation splits rate call predictions

Pakistan’s October inflation is forecast to reach 10%, with electricity, fuel and food costs among the pressures, The Express Tribune reported. Growth Securities estimates consumer prices will climb 1.5% month on month, while average inflation for the first four months of FY27 could reach 10.2%, compared with 4.8% a year earlier. Its report says the State Bank could increase its policy rate by 50 to 100 basis points at the October 26 meeting if fuel prices stay high.

AKD Securities’ research director Mohammed Awais Ashraf takes the opposing view, arguing that stronger reserves, remittances and exports, alongside a contained current account, support leaving rates unchanged. He also cited slower large-scale manufacturing and lower fuel prices since the last policy meeting, while lifting his FY27 inflation estimate to 9.1% from an earlier projection and moving the expected start of monetary easing to April 2027 from October 2026. The contrasting assessments underline uncertainty ahead of the SBP’s rate decision.