Pakistan's August CPI jumps to 11.15% YoY
The Pakistan Bureau of Statistics reported consumer price inflation of 11.15% in August, up sharply from 9.2% in July and far above the 3.1% recorded a year earlier.
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Desk Analysis
How This Affects the Exchange
Sector Effect
Negative · Do not buy
Rising inflation pressures consumer demand and may trigger tighter monetary policy, so Don't buy across most sectors.
Sectors & Direction
Desk read
Desk call: Do not buy · Negatively affected
- BanksNegatively affected
- CementNegatively affected
- TextileNegatively affected
- AutomobileNegatively affected
- PowerNegatively affected
- FertilizerNegatively affected
Companies
Mentions in This Briefing
Sectors: Banks, Cement, Textile, Automobile, Power, Fertilizer — Negative · Do not buy. PSX tickers: FFC, EFERT, ENGRO. Rising inflation pressures consumer demand and may trigger tighter monetary policy, so Don't buy across most sectors.
Full Story
Open on Business Recorder## Inflation Surge in August
The Pakistan Bureau of Statistics (PBS) released the latest Consumer Price Index (CPI) data on Tuesday, showing that inflation accelerated to 11.15% year‑on‑year in August 2024. This marks a steep rise from 9.2% in July and a dramatic increase compared with 3.1% recorded in August 2023.
## Monthly Trend
On a month‑on‑month basis, the CPI continued its upward trajectory, reflecting higher prices across food, fuel, and core goods. The PBS highlighted that food items contributed the largest share to the increase, while transport and energy costs also rose markedly.
## Monetary Policy Implications
The surge in inflation adds pressure on the State Bank of Pakistan (SBP) to consider tighter monetary policy. Analysts expect the SBP may raise policy rates or maintain a restrictive stance to curb price pressures, which could affect credit growth and borrowing costs.
## Impact on Businesses and Consumers
Higher inflation erodes real disposable income, dampening consumer demand for non‑essential goods. Companies in sectors such as cement, textiles, automobiles, and consumer retail may face weaker sales as purchasing power contracts. Conversely, firms with pricing power or exposure to inflation‑linked contracts may mitigate some impact.
## Outlook
Economists warn that if inflation remains above the SBP’s target band, the central bank could intervene more aggressively, potentially leading to higher financing costs for corporates and investors. Market participants will watch upcoming SBP statements and any fiscal measures aimed at stabilising prices.