ISLAMABAD: Inflation, measured by the Consumer Price Index (CPI), rose to 5.6 per cent in September, up from 3pc in August, marking a sharp increase driven by rising prices of perishable goods, according to official data released by the Pakistan Bureau of Statistics (PBS) on Wednesday.

The reversal in the inflation trend over the past two months is largely attributed to a sharp rise in the prices of essential food items. The inflation between July and September was recorded at 4.22pc this year, the lowest compared to 9.19pc over the corresponding months of last year. This lower rate is also due to the high base effect of last year.

Despite the month-on-month increase, average annual inflation for FY25 dropped sharply to 4.49pc from 23.41pc in the previous year, aided by a high base effect, declining food prices, and lower transport costs.

Economists describe the current trend as disinflation — a slowdown in the rate of price increases, rather than a general decline as seen in deflation — although the cost of living remains high for many households.

Finance ministry already cautioned that supply chain disruptions triggered by floods could hike inflation

Inflation had previously fallen into single digits in August 2024 — at 9.6pc — for the first time in over three years, continuing a declining trend until the recent rebound. The government has projected an inflation target of 7pc for the current fiscal year.

The Ministry of Finance, in its Monthly Economic Update and Outlook for September, has cautioned that supply chain disruptions triggered by ongoing floods could temporarily push inflation higher, despite gains in fiscal and industrial indicators.

It further said that due to ongoing floods in 2025, the agriculture sector is expected to suffer. Flood-related disruptions may exert pressure on food supply chains, leading to an uptick in prices.

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Food inflation in September increased by 4.4pc in urban areas and 6pc in rural areas, while non-food inflation reached 6.2pc in urban areas and 5.6pc in rural areas. This indicates that non-food inflation remains very high.

In September, core inflation — excluding volatile food and energy components — stood at 7pc in urban areas and 7.8pc in rural areas.

Urban food items that saw notable month-on-month price increases included tomatoes (65.04pc), wheat (37.58pc), wheat flour (34.43pc), onions (28.48pc), fresh vegetables (9.03pc), wheat products (6.86pc), potatoes (5.72pc), eggs (4.49pc), butter (3.55pc), sugar (2.74pc), rice (2.59pc), gur (1.50pc), pulse gram (1.45pc), besan (0.98pc) and fresh fruits (0.92pc).

Conversely, declines were noted in chicken (5.33pc), pulse mash (1.17pc), beans (0.66pc), gram whole (0.40pc), pulse moong (0.22pc) and cooking oil (0.01pc).

Non-food categories also witnessed significant price hikes, including liquified hydrocarbons (4.54pc), postal services (1.36pc), drugs and medicines (0.96pc), household textiles (0.84pc), marriage hall charges (0.69pc), medical tests (0.68pc), solid fuel (0.62pc), household servant (0.56pc) and construction input items (0.53pc).

Published in Dawn, October 2nd, 2025