ISLAMABAD: Short-term inflation rose to 11.85 per cent year-on-year in the week ending October 22, driven largely by wheat flour prices, according to official data released by the Pakistan Bureau of Statistics (PBS) on Friday.

The index, which comprises 51 items whose prices are collected from 50 markets in 17 cities, is calculated weekly to track changes in the prices of essential commodities and services.

Short-term inflation has remained in double digits for several consecutive weeks, largely on the back of persistent increases in petroleum prices.

The data showed that of the 51 essential items monitored during the week, the prices of 19 commodities (37.72pc) increased, while those of 12 items (23.53pc) declined. Meanwhile, the prices of 20 items (39.22pc) remained unchanged from the previous week.

The Sensitive Price Index (SPI), which tracks short-term inflation, slightly increased by 0.65pc week-on-week, reflecting price fluctuations in both food and non-food items.

Unwilling to ease the petroleum levy, the government has continued to raise petrol and diesel prices on a daily basis. The surge in energy costs is not only fuelling inflationary pressures but also indirectly boosting sales tax collections through higher prices of goods and services.

This is cost-push inflation, in which rising energy costs are followed by increases in food prices. As a result, households are under pressure from higher consumer prices.

The items whose prices increased the most over the previous week included liquefied petroleum gas (22.44pc), chicken (12.20pc), onions (4.19pc), shirting (1.86pc), plain bread (1.66pc), wheat flour (1pc), garlic (0.74pc), firewood (0.71pc), georgette and one kilogramme of vegetable ghee (0.59pc each), beef (0.31pc) and pulse mash (0.30pc).

The items whose prices declined week-on-week included tomatoes (21.99pc), petrol (3.63pc), banana (2.42pc), diesel (1.68pc), potatoes (1.38pc), pulse gram (0.93pc), eggs (0.58pc), powdered milk (0.38pc) and broken rice basmati and sugar (0.35pc each).

On an annual basis, the items that recorded the highest price increases included LPG (107.12pc), onions (72.81pc), electricity for Q1 (58.59pc), petrol (44.17pc), diesel (41.56pc), chicken (38.99pc), wheat flour (36.49pc), chilies powder (15.55pc), mutton (14.66pc), beef (12.10pc), bread plain (10.82pc) and tea prepared (8.36pc).

In contrast, tomato prices fell by 71.72pc, followed by potatoes (40.75pc), sugar (25pc), eggs (22.14pc), salt powder (14.86pc), pulse masoor (9.08pc), gur (8.98pc) and pulse moong (7.05pc).

Last week, short-term inflation rose to 11.38 per cent year-on-year, driven largely by higher food prices, data from PBS showed.

ISLAMABAD: The government has increased profit rates on several national savings schemes, including those for pensioners, senior citizens and families of martyrs, with the revised rates taking effect from October 21.

According to the revised schedule issued by the Central Directorate of National Savings (CDNS), the profit rate on Behbood Savings Certificates, Pensioners’ Benefit Accounts and Shuhada’s Family Welfare Accounts has been raised to 12.96 per cent from 12.72pc.

The increase will raise the monthly profit on an investment of Rs100,000 under these schemes to Rs1,080 from Rs1,060.

Similarly, the profit rate on Regular Income Certificates has been increased to 12.12pc from 11.76pc. The revised rate will provide a monthly return of Rs1,010 on an investment of Rs100,000, compared with Rs980 previously.

The profit rate on Special Savings Certificates has been increased to 12pc from 11.6pc for the first five profit payments. Under the revised schedule, investors will receive Rs6,000 on an investment of Rs100,000 every six months, while the sixth and final profit payment will be Rs6,400 at a rate of 12.8pc.

The government has also raised cumulative profit rates on Defence Savings Certificates across different maturity periods. For six-year certificates, the cumulative return has increased to 88pc from 86pc, while the seven-year return has risen to 113pc from 109pc.

Similarly, the eight-year return has increased to 142pc from 136pc, while the nine-year return has been raised to 176pc from 168pc. The cumulative return on certificates held for 10 years has increased to 215pc from 205pc.

Profit rates on Short Term Savings Certificates have also been revised upwards. The rate on three-month certificates has increased to 11.12pc from 10.80pc, while the revised schedule provides rates of up to 11.72pc for longer maturities.

The government has also increased returns on Sharia-compliant savings schemes. Profit rates on Sarwa Islamic Term Accounts now range between 11.84pc and 12.12pc for different maturities, while the rate on Sarwa Islamic Savings Accounts has been raised to 11.84pc from 11.33pc.

However, the profit rate on ordinary Savings Accounts has been maintained at 10pc per annum.

According to the official schedule, profits on national savings schemes are subject to withholding tax at 15pc for filers and 30pc for non-filers, while Zakat deductions apply where prescribed under the relevant rules.

ISLAMABAD: The International Monetary Fund (IMF) has called for Pakistan’s fiscal policy to go beyond achieving primary balance targets and protecting debt sustainability by reinforcing policy credibility, fostering economic recovery and creating space for public investment and social spending to support stronger long-term growth.

Speaking at a workshop on “Reforms for a Modern and Growth-Friendly Tax System in Pakistan”, IMF Middle East and Central Asia Department Director Jihad Azour said tax refo­rm was critical to Pak­is­tan’s economic growth agenda and rema­ined central to the objectives of the Extended Fund Facility (EFF).

The workshop was organised by the Ministry of Finance and Revenue in collaboration with the IMF. Finance Minister Muha­mmad Aurangzeb also spoke at the workshop, highlighting achiev­ements over the past two years.

Mr Azour said Pakistan had made important progress towards restoring macroeconomic stability, rebuilding confidence, strengthening external buffers and supporting a gradual economic recovery despite an era of shocks and uncertainty.

Jihad Azour calls for broader, more predictable tax system

The IMF official said Pakistan’s recent stabilisation gains had created an opportunity that needed to be strengthened through transformative reforms, with tax reform at the heart of the process. “A stronger, broader, fairer and more predictable tax system can support fiscal sustainability while reducing distortions that hold back investment, productivity, growth and formal job creation,” he remarked.

He said broadening the tax base, strengthening revenue administration, reducing tax expenditures, protecting priority spending and improving public service provision were Pakistan’s priorities.

He credited Pakistan for the progress made. However, he said the next milestone was to turn stabilisation into stronger and more durable growth by moving beyond cycles of adjustment towa­r­ds a more competitive, inv­e­s­tment-friendly and inclusive economy.

Mr Azour said the IMF remained committed to supporting the authorities in building an economy capable of delivering hig­her productivity, led by a stronger private sector, and creating better opportunities for younger generations.

He warned that the highly uncertain external environment had made these objectives more urgent. Fiscal policy, he said, must do more than achieve primary balance targets and protect debt sustainability. It must reinforce policy credibility, foster recovery and create space for public investment and social spending needed to support long-term growth and public welfare.

Outlining four themes for discussion during the two-day workshop, Mr Azour identified credibility, growth, fairness and implementation as central to the reform process.

Published in Dawn, October 21st, 2026

ISLAMABAD: Prime Minister Shehbaz Sharif on Monday warned tax officers that resistance to the ongoing reforms in the Federal Board of Revenue (FBR) would not be tolerated, directing the authorities to implement proposed measures to minimise the country’s tax gap.

The prime minister’s warning came during a weekly briefing on tax reforms, following a call for a pen-down strike by the Inland Revenue Officers Association. The strike call was later withdrawn after intervention by senior FBR officials. FBR Chairman Rashid Mahmood Langrial briefed the prime minister on the pilot project for faceless assessment and audit.

A source privy to the meeting told Dawn that the prime minister expressed displeasure over the strike announcement. “We will not tolerate any resistance against the ongoing reforms in the FBR,” PM Shehbaz was quoted as saying, adding that officers unwilling to work would be asked to leave.

The prime minister reminded tax officers that their salaries had been increased fourfold and that they had been provided with vehicles and accommodation. “We have extended every facility to these officers,” he said, adding that it was now their responsibility to deliver results and justify the incentives granted to them.

The FBR has established the National Faceless Centre (NFC) in Islamabad, where dedicated wings will handle audits and assessments through a faceless system aimed at reducing official discretion and direct contact between tax officials and taxpayers.

Initially staffed by 27 officers, the centre has been tasked with auditing and assessing third-party data relating to 300,000 to 400,000 individuals under a pilot project that became effective on October 1. The data will be referred to the NFC in phases after the completion of initial compliance checks.

According to an official announcement by the Prime Minister’s Secretariat, PM Shehbaz directed that the pace of FBR reforms be accelerated, noting that the initial results of the ongoing measures were encouraging.

He emphasised that the institution’s capacity must be continuously strengthened to bridge the tax gap.

The prime minister directed the FBR chairman to expedite the rollout of the faceless system in tax collection. “These reforms are in the larger interest of the state and will continue under all circumstances,” he said, adding that indiscriminate action should be taken against corrupt officials.

He further directed that officers and staff showing improvements in conduct and performance be given opportunities to reform, while those persisting in corruption and inefficiency would have no place in the organisation.

Meanwhile, the FBR suspended two Inland Revenue Service officers, one in BS-20 and the other in BS-19, and repatriated two other BS-20 officers to FBR Headquarters for further investigation over an unauthorised press statement and a call to suspend official work.

Published in Dawn, October 20th, 2026

• Industrial, services sector slowdown drags down economic growth in FY26
• Per capita income ‘lowest in region’; economy reaches $450.4bn

ISLAMABAD: The government on Monday revised the gross domestic product (GDP) growth slightly downward to 3.65 per cent for the outgoing fiscal year (FY26), attributing the adjustment to a mild slowdown in the industrial and services sectors.

The country’s GDP registered modest growth alongside an increase in per capita income in dollar terms, reflecting a sluggish pace of recovery in the country’s overall output compared with the previous year, the government said.

In May 2026, the government had projected the economy to grow by 3.70pc in FY26, revising its earlier estimate of 4pc. The downward adjustment now indicates that the country fell short of its GDP target.

The revised growth rates in agriculture, industry and services in FY26 are 3.50pc, 3.34pc and 3.81pc, respectively, compared with earlier growth rates of 2.89pc, 3.51pc and 4.09pc.

The revision came during the 118th meeting of the National Accounts Committee (NAC), which was held on Monday at the Pakistan Bureau of Statistics.

The NAC estimate places Pakistan broadly in line with the outlook of multilateral lenders, though with some variation.

The International Monetary Fund has projected GDP growth at 3.6pc for FY26, the World Bank at 3.7pc and the Asian Development Bank at 3.7pc, while the State Bank of Pakistan expects growth to remain close to 3.7pc.

The committee approved the incorporation of revised imports data in the national accounts estimates from FY21 to FY25, quarterly GDP growth rates for Q1 (revised), Q2 (revised), Q3 (revised), and Q4 during FY26 and updated annual growth rates for FY25 and FY26.

The size of the economy rose to $450.4 billion in FY26 from $410.96bn in FY25, mainly driven by growth in the services sector, followed by industry and livestock.

Per capita income slightly increased to $1,896 in FY26, the lowest in the region, up from $1,824 in FY25. The projection is based on the 2023 census. However, it was $1,551 in FY23, $1,766 in FY22 and $1,677 in FY21.

This suggests a deterioration in the standard of living and well-being acro­ss almost all segments of society, with no tangible increase in personal incomes due to unprecedented inflationary pressures, which reduce disposable income and limit individuals’ ability to afford goods and services, save, or invest.

Updated growth rates

Meanwhile, the NAC also approved the updated growth rates for Q1, Q2 and Q3 of 2025-26 at 3.89pc, 4.31pc and 4.42pc, respectively, compared with 3.92pc, 4.05pc and 3.99pc, presented at the 117th meeting of the NAC. The fourth quarter of FY26 recorded a 2pc growth in GDP. The committee approved the updated annual growth of 3.11pc for FY25, which was estimated at 3.18pc in the previous meeting.

In agriculture, important crops improved from 0.65pc to 1.59pc due to wheat and maize, other crops have witnessed significant improvement from 2.43pc to 4.28pc due to higher production of pulses (6.3pc), fruits (1.3pc), tomato (44pc), oilseed (5.4pc), and green fodder (2.4pc). Livestock decreased slightly from 3.75pc to 3.71pc because of increased fodder inputs. Updated growth rates in forestry and fishing are 10.80pc and 1.39pc, respectively.

The committee revised growth in industry during FY26 to 3.34pc from 3.51pc estimated previously. The mining & quarrying industry has improved from 0.38pc to 1.52pc due to improvement in gas (2.84pc), crude oil (5.12pc), and coal (2.73pc). Large-scale manufacturing (LSM), which is measured through the Quantum Index of Manufacturing (QIM), has declined from 6.11pc to 5.01pc.

The major LSM groups with positive contributions are food (7.03pc), tobacco (12.61pc), petroleum products (9.7pc), rubber products (14.19­pc), electrical equi­pment (14.25pc), automobiles (57.77­pc), transport equipment (42.36pc), furniture (22.69pc), and other manufacturing (foot­ball) (16.62pc). The construction industry has improved from 5.73pc to 6.30pc because of increased construction-related expenditure in the public sector.

However, some LSM groups posted negative growth, e.g., pharmaceuticals (-8.87pc), iron & steel products (-7.84pc), chemicals (-2.53pc), and leather products (-1.95pc), electricity (-10.24pc) in FY26.

The services industry has declined from 4.09pc to 3.81pc in FY26, with positive contributions from all the constituents. The growth in wholesale and retail trade posted at 2.37pc as against the previous growth of 3.71pc due to decrease in manufacturing and imports.

Transport and storage industry growth improved to 3.23pc from 2.31pc due to upward revisions reported in railways, water transport, and air transport. Similarly, information & communication growth increased from 7.52pc to 9.53pc, the finance & insurance also improved from 0.32pc to 4.23pc in FY26 due to improvement in the insurance industry.

The slowdown was also reported in public administration and social security to 5.67pc from 8.54pc, education 4.17pc from 5.23pc, and human health and social work 5.52pc from 6.85pc.

Published in Dawn, October 20th, 2026