According to The Express Tribune, Pakistan's headline inflation is expected to climb to 10% in October 2026 on higher electricity, petrol and food prices, and brokerages are divided over whether the State Bank of Pakistan will raise or hold its policy rate at its October 26 meeting.
Growth Securities: a 50-100bp hike possible
A Growth Securities report by Nasheed Malik projects the national CPI rising 1.5% month-on-month in October, against 6.2% year-on-year in October 2025. Average inflation in the first four months of FY27 is put at 10.2%, compared with 4.8% a year earlier and above the government's 8.9% full-year assumption.
The report notes the average petrol price rose 5.5% in a month to Rs396.06 a litre, while LPG prices are projected up 6.2% month-on-month. On food, it cites increases of 10% in wheat, 14% in chicken, 11% in gram pulse and 5% in garlic. Malik expects the Monetary Policy Committee to raise rates by 50-100 basis points if fuel prices stay high.
AKD: room to hold
AKD Securities research director Mohammed Awais Ashraf argues that strong remittances, improving exports, record foreign exchange reserves and a contained current account give the SBP room to keep rates unchanged. He also points to the $3 billion Eurobond issued at record-low spreads, slowing large-scale manufacturing and lower oil prices since the last meeting.
Ashraf has raised his FY27 inflation forecast to 9.1% and pushed his expected start of monetary easing from October 2026 to April 2027. The report says Dubai crude has fallen 15.5% since the previous MPC meeting, from $127 to $107 a barrel.