Pakistan headline inflation jumps to 24.5% on the back of food price hikes

A man shops for grocery items at a store in Peshawar, Pakistan on April 27, 2018. (REUTERS/File)
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Updated 02 January 2023
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Pakistan headline inflation jumps to 24.5% on the back of food price hikes

  • Persistently high inflation has put severe strain on Pakistan’s economy already reeling from multiple woes 
  • Experts say inflation may go as high as 27% once government implements IMF conditions by raising energy prices  

ISLAMABAD: Pakistan's annual inflation, measured by the consumer price index (CPI), rose to 24.5 percent in December on a year-on-year basis, the country’s statistics bureau said on Monday, with experts saying it could go further up once the country receives the much-awaited loan tranche from the International Monetary Fund (IMF). 

Persistently high inflation has put a severe strain on the South Asian economy, already reeling from a balance-of-payment crisis, dwindling forex reserves and currency depreciation.  

On Monday, the Pakistan Bureau of Statistics (PBS) said in a statement that the overall prices were up 0.5 percent in December on a month-on-month basis.  

“CPI inflation (general) increased to 24.5% on a year-on-year basis in Dec. 2022 as compared to an increase of 23.8% in the previous month and 12.3% in Dec. 2021”, the bureau said in the statement. 

“On [a] month-on-month basis, it increased to 0.5% in Dec. 2022 as compared to an increase of 0.8% in the previous month and with no change in Dec. 2021.” 

With the foreign exchange reserves plummeting to $5.8 billion in December — barely enough for a month of imports — the South Asian country faces the specter of a default on its international financial obligations and desperately awaits external financing.  

An IMF review of Pakistan's $7 billion loan program, secured in 2019, is pending since September. Once approved, the global money lender will provide over $1.1 billion to the cash-strapped nation.  

Financial experts believe inflation will further increase once the country receives another tranche from the IMF and implements the lender’s conditions. 

“The food price hike of 35.5% played a major contribution to the overall inflation during the month of December [and] inflation has been witnessed across the board,” Tahir Abbas, a research head at the Karachi-based Arif Habib Limited brokerage firm, told Arab News.  

“The inflation may increase to around 27% if the government implements IMF conditions by raising electricity and gas tariff, and determines market-based currency exchange rate.” 

Abbas said the country needed to take these measures for the continuity of the IMF program and had “no other option in hand.” 


Pakistani man convicted in US in political assassination plot tied to Iranian paramilitary

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Pakistani man convicted in US in political assassination plot tied to Iranian paramilitary

  • Asif Merchant, 47, worked for Pakistani banks for decades before going into clothing and other businesses
  • He testified he met a Revolutionary Guard operative who gave him countersurveillance training, assignments

NEW YORK: A Pakistani business owner who tried to hire hit men to kill a US politician was convicted Friday in a trial that showcased allegations of Iran-backed plotting on American soil.

As the Iran war unfolded in the Mideast, Asif Merchant acknowledged in a US court that he sought to put an assassination in motion during the 2024 presidential campaign — a plot that was quickly disrupted by American investigators before it had a chance to proceed.

A jury in Brooklyn convicted Merchant on terrorism and murder for hire charges.

The verdict after only a couple hours of deliberations followed a weeklong trial that included remarkable testimony from Merchant himself.

Merchant told the jury he was carrying out instructions from a contact in the Islamic Republic’s powerful paramilitary Revolutionary Guard. According to Merchant, the handler never specified a target but broached names including then-candidate Donald Trump, then-President Joe Biden and Nikki Haley, the former UN ambassador who was also in the race for a time.

The Iranian government has denied trying to kill US officials.

The nascent plot fell apart after Merchant showed an acquaintance what he had in mind by using objects on a napkin to depict a shooting at a rally. He asked the man to help him hire assassins. Instead, he was introduced to undercover FBI agents who were secretly recording him, as had the acquaintance.

Merchant told the supposed hit men he needed services that could include killing “some political person” and paid them $5,000 in cash in a parked car in Manhattan.

“This man landed on American soil hoping to kill President Trump — instead, he was met with the might of American law enforcement,” US Attorney General Pam Bondi said in a statement released after the conviction.

Merchant’s attorney, Avraham Moskowitz, didn’t immediately reply to a message seeking comment.

Merchant, 47, worked for Pakistani banks for decades before going into clothing and other businesses. He has two families, in Pakistan and Iran, and he sometimes visited the US for his garment business.

Merchant testified that he met a Revolutionary Guard intelligence operative about three years ago. The contact gave him countersurveillance training and assignments including the assassination scheme, Merchant said.

He maintained that he had to do his handler’s bidding to protect loved ones in Iran. The defendant said he reluctantly went through the motions but thought he’d be arrested and explain his situation to authorities before anyone was killed.

“I was going along with it,” he said, speaking in Urdu through a court interpreter.

Prosecutors emphasized that Merchant admitted taking steps to enact the plan on behalf of the Revolutionary Guard, which the US considers a foreign terrorist organization, and he didn’t proactively go to authorities.

Instead, he was packing for a flight to Pakistan when he was arrested on July 12, 2024, a day before an unrelated attempt on Trump’s life in Butler, Pennsylvania. Officials said it appeared the Butler gunman acted alone but that they had been tracking a threat on Trump’s life from Iran, a claim that the Islamic Republic called “unsubstantiated and malicious.”

When Merchant subsequently spoke to FBI agents to explore the possibility of a cooperation agreement, he didn’t say he had acted out of fear for his family.

Prosecutors argued that he didn’t back up a defense of acting under duress. Merchant sought to persuade jurors he simply didn’t think the agents would believe him because they seemed to “think that I am some type of super-spy,” which he said he was “absolutely not.”