Beating Inflation with PSX Stocks

Pakistan’s average inflation over the past 20 years: ~8%. PSX’s KSE-100 returned ~14% annualized. Result: stocks beat inflation by 6% per year on average.

Bank deposits have paid much less. In September 2026, for example, a major Islamic bank's one-year term deposit paid about 6% a year while consumer price inflation ran at around 10%, so the real return was negative even before tax. Government securities paid more (the 6-month T-bill about 11.7% and the 10-year PIB about 12.5% in September 2026) but not far above inflation. Rates change often, so check the current figures. See Fixed Deposits vs Stocks for a worked comparison using real PSX examples.

Lesson: A diversified portfolio of PSX stocks is one of the best long‑term hedges against rising prices.

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