According to statistics published by the Pakistan Bureau of Statistics (PBS) on Wednesday, inflation, as measured by the Consumer Price Index (CPI), surged to a nearly two-and-a-half-year high of 13.76% in May, owing to rising transport and food prices.
In May, inflation increased from 13.37 percent year on year (YoY) to 0.44 percent month on month (MoM).
This is the highest rate of CPI inflation since January 2020, when it reached 14.6 percent.
According to the PBS, it grew by 12.36 percent in cities and 15.88 percent in rural regions.
Transport topped the inflationary trend, rising 31.77 percent, followed by food, which rose 17.25 percent. According to PBS statistics, perishable food prices grew by 26.37 percent, while non-perishable food prices increased by 15.94 percent.
Other double-digit growth categories included furnishing and household equipment maintenance (16.11%), restaurants and hotels (15.98%), miscellaneous goods and services (13.32%), recreation and culture (12.28%), clothing and footwear (11.29%), health (10.59%), and alcoholic beverages and tobacco (10.59%). (10.13pc).
In a report released last week, the finance ministry identified accelerating inflation, as well as other factors such as high external deficits, exchange rate depreciation, declining foreign exchange reserves, and mounting uncertainty.
According to the research, the key factors to rising inflation were a jump in international commodity prices and a considerable devaluation of the currency. In truth, the rupee’s depreciation, both against the US dollar and against the currencies of Pakistan’s key trading partners, is essentially a reflection of the country’s and its partners’ inflation differentials.
Furthermore, rupee depreciation compensates for rather high domestic inflation. Currency depreciation, on the other hand, contributes to increased domestic inflation. In this sense, Pakistan is trapped in a vicious inflation spiral.
For the long run, Pakistan’s major issues may be addressed by developing a credible, sustainable future economic trajectory that inspires consumer and investor confidence.
Visit CxO Global FORUM or CxO News Live for all the latest updates.