MediumIV Macro Policy & Sovereign Debt9 October 2026, Friday
Flour prices push Pakistan's weekly inflation close to 12%
Data released by the Pakistan Bureau of Statistics on 9 October show short-term inflation rose to 11.97% year on year in the week ended 8 October. The rate was 11.53% a week earlier, with wheat flour and chicken driving the increase.
The Sensitive Price Indicator (SPI), a short-term inflation gauge tracking the weekly prices of 51 essential items in 17 cities, rose 0.57% in the week ended 8 October, from 370.46 to 372.58 points. The Tribune reported on 10 October that the index stood at 332.75 points in the same week a year earlier, an annual rise of 11.97%. Of the 51 items, 20 became more expensive, 6 cheaper and 25 were unchanged.
Wheat flour led the weekly rise at 5.69%, followed by chicken at 4.93%. Dawn reported on 9 October that millers in Karachi added another 6 rupees to the price of a kilo of flour on 8 October, taking the increase over a few days to 20 rupees. To stabilise prices, the Sindh government plans to release wheat stocks from 15 October at 12,500 rupees per 100-kilo bag. Total stocks available for release amount to 836,414 tonnes.
The steepest annual rises are in energy and energy-linked items. Onions rose 100.24%, LPG 68.55%, the first-quarter electricity tariff 58.59%, petrol 47.52% and diesel 42.52%. According to Dawn, the government is not cutting fuel taxes. Petrol rose 2.31 rupees a litre on 8 October and was then cut by 0.66 rupees to 398.30 rupees for 10–12 October. The annual rate is 12.48% for the highest consumption bracket and 9.41% for the lowest.
Talay assessment
Bottom line
An annual rate of 11.97% shows the oil shock passing through to food via transport costs. Annual rises of 47.52% in petrol and 68.55% in LPG persist, and the 20-rupee jump in flour suggests the pressure is not confined to energy. The likeliest path is the weekly SPI staying in double digits for several more weeks. Sindh's stock release from 15 October can only rein in flour prices.
Likely effects
- Household budgetsNegativeWeeks
Flour rose 5.69% and chicken 4.93% in a week; increases in staples hit hardest the households that spend most of their budget on food.
- Monetary policyNegative1–6 months
Weekly SPI inflation nearing 12%, up from 11.53% in a week, narrows the central bank's room to cut rates.
- Public revenueUncertain1–6 months
Tax analysts cited by Dawn say high inflation inflates sales tax receipts; keeping the fuel levy supports the revenue target.
Possibilities, ranked
- 1Double digits persist55%
Fuel prices stay high with frequent adjustments and the SPI holds in an 11–13% annual band.
Watch: PBS SPI data for the weeks of 15 and 22 October
- 2Wheat stocks apply the brakes30%
Sindh's wheat sales steady flour prices and the annual rate falls below 11%.
Watch: The price of grade 2.5 flour in Karachi falling below 161 rupees a kilo
- 3Fresh jump15%
Higher oil prices feed into petrol and diesel and the SPI exceeds 13% year on year.
Watch: Petrol rising back above 400 rupees a litre
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- SPI y/y (week to 8 Oct)▲ 11.97%
- Wheat flour, weekly▲ +5.69%
- Petrol, y/y▲ +47.52%
- Potatoes, y/y▼ −39.51%
Sources
- Dawn — Short-term inflation rises to 11.97pc, PBS data shows
- The Express Tribune — Staples, fuel keep SPI near 12% YoY
- Pakistan Bureau of Statistics — Weekly SPI for the week ended on 08-10-2026
- Dawn — Flour millers deliver another price shock
- Dawn — Govt reduces petrol price by Re0.66 per litre, raises HSD rate by Re0.52