Pakistan inflation hits 13-yr high
CPI clocks in at 21.3 per cent due to a steep rise in prices of energy, food groups
Sunday, 3 July 2022
In an alarming development, Pakistan's inflation, as measured by the Consumer Price Index (CPI), broke a 13-year record and skyrocketed to 21.3 per cent in June due to a steep rise in prices of energy and food groups amid chances of a further surge in petroleum, electricity and gas tariffs under the International Monetary Fund (IMF) conditions, reports The Express Tribune.
The fresh inflation reading issued by the Pakistan Bureau of Statistics (PBS) on Friday has also augmented the prospects of a further rise in interest rates in the upcoming monetary policy.
The inflation rate swirled to 21.3 per cent in June over a year- the highest pace in over 13 years. Last time, in February 2009, the inflation had been recorded at slightly over 21 per cent.
The pace of increase in the prices beats the expectations of the finance ministry that had just two days ago given a 14.5 per cent to 15.5 per cent inflation range. The markets had projected close to 19 per cent inflation in June due to the government's decision to increase the prices of petroleum products, electricity and steep currency devaluation.
The monthly inflation rate jumped 6.3 per cent in June over May -probably the highest increase in a single month in the history of Pakistan.
The inflation reading suggests that the government will have to review its strategy to gradually succumb to all the IMF's demands. The government has not been able to regain any lost ground from the IMF and is giving one after another shock to the people.
The core inflation, calculated after excluding the volatile energy and food prices, also spiralled to 11.5 per cent last month in urban areas and 13.6 per cent in rural areas, signalling price growth is gathering pace across most categories of goods and services.
Another round of increase in fuel prices is expected next month under the IMF condition to impose Rs10 per litre levy on petrol and Rs5 on diesel. The Minister of State for Petroleum Dr Musaddiq Malik also hinted at a 40 per cent to 45 per cent increase in the gas prices from this month.