KARACHI: Pakistan’s inflation rate surged to 27.6 percent, the highest in over four decades, on a year-on-year basis in January 2023, due to a surge in the cost of transportation and commodities, according to official data released on Wednesday.
On a month-on-month (MoM) basis, the consumer price index (CPI) was up 2.9 percent as compared to an increase of 0.5 percent last month, according to Pakistan Bureau of Statistics (PBS).
On January 1, the statistics bureau said Pakistan’s consumer price index rose 24.5 percent in December, year-on-year.
Arif Habib Limited, a Karachi-based investment firm said year-on-year inflation was the highest since May 1975, which saw a rise of 27.8%.
“The monthly CPI is highest in at least 20 years,” Muhammad Sohail, CEO of Topline Securities, told Arab News.
“This takes seven months of the current fiscal year’s (7MFY23) average inflation to 25.4 percent compared to 10.3 percent in the same period last year. Inflation remained higher than market expectations.”
Rural inflation increased to 32.3 percent on a year-on-year basis in the months of January 2023 as compared to an increase of 28.8 percent in the previous month and 12.9 percent in January 2022. Food inflation increased to 42.9 percent in January 2023 as the prices of chicken, wheat, rice, wheat flour and vegetable increased according to the bureau of statistics.
Pakistan last week enhanced the prices of petroleum by Rs35 per litter and devalued its currency by almost 13 percent ahead of talks with the International Monetary Fund (IMF) for the revival of a stalled $7 billion loan program.
Analysts say the recent impact of the petroleum price hike and massive rupee depreciation has “yet to come.”
Pushed to the brink by last year’s devastating floods, the South Asian nation has reserves of just $3.7 billion remaining, or barely enough for three weeks of essential imports, while hotly contested elections are due by November.
It desperately needs the IMF to release an overdue tranche of $1.1 billion, leaving $1.4 billion remaining in a stalled bailout program set to end in June.
