Inflation breaks 50 years record, goes up to 35. 37 per cent

Lahore:  Pakistan Bureau of Statistics (PBS) published new data revealing that inflation, as measured by the Consumer Price Index (CPI), surged to an unprecedented 35.37% year-on-year (YoY) in March.

In comparison, inflation was reported at 12.72% in March 2022. According to the PBS figures, prices in both urban and rural areas escalated by 32.97% and 38.88% year-on-year, respectively.

The  Sensitive Price Indicator (SPI) recorded a short-term inflation rate of 46.65% last week, while the CPI's monthly inflation rate hit 31.6% in February - the highest in six decades.

Consumer prices have been surging over the last few months, with annual inflation remaining above 20% since June last year.

The finance ministry published its Monthly Economic Update & Outlook, which predicted a further increase in inflation due to policy decisions made earlier to increase energy and fuel prices, raise the central bank's policy rate, and depreciate the rupee to obtain IMF funding.

The Economic Adviser's Wing of the finance ministry also acknowledged that policy measures had been ineffective, and that the authorities had been unable to contain the inflationary spiral.

Despite the State Bank of Pakistan's (SBP) contractionary monetary policy, the ministry stated that inflationary expectations were still not settling down. It also attributed the challenge to demand pressures during Ramadan.

The ministry cautioned that bulk buying during Ramadan could result in a demand-supply gap and an increase in prices of essential items. However, the government was aware of the situation and had already collaborated with all provincial governments to ensure the smooth supply of essential items.