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Saturday, May 18, 2024

January CPI spikes to 27.5%

Pakistan's consumer price index escalated to 27.5% year-on-year in January due to consistently high inflation amidst economic turmoil.

The annual inflation, recorded by the Consumer Price Index (CPI) spiked up to 27.5% against 24.5 % in December, the highest since 1975. Whereas, in January 2022 the inflation rate was almost 13%. The inflation rate continues to elevate as the prices of food and transportation increase. Pakistan’s economy has been largely affected by sharp currency devaluation, insufficient foreign exchange reserves, and the devastating floods in August last year.

Pakistan’s Bureau of Statistics (PBS) said in a statement;

“Prices were up 2.9% in January from the previous month”

The Finance Ministry has cited economic and political uncertainty for the massive price hike in the country.

Read more: Record High Exchange Rate of USD against Pak Rupee

Consumer Price Index Breakdown:

According to the data released by PBS, inflation in urban and rural areas has also increased. The statistics show an increase of almost 24.38% and 32.26% year-on-year basis, respectively. Similarly, the urban core inflation grew by 1.4% and rural core inflation rose to 1.5% compared to last month.

Additionally, the inflationary trend was seen in almost all sub-indices. The year-on-year price hike in perishable food items has increased up to 61.63% and non-perishable food items experience a price increase of 40.34%. Moreover, inflation on recreation and culture has increased to 44.14% and the costs of transport have increased to almost 39.1%. Likewise, health, education, and utilities have increased up to 18.73%, 10.58%, and 7.83% respectively.

Read more: FBR surpasses the monthly budgetary target by Rs 4 billion

Furthermore, the inflation rate of 27.5% has also exceeded the government’s budgeted target of 11.5%. This decade’s high inflation trend could be attributed to the highest dollar exchange rate when the government removed the unofficial cap and the fuel price hike in the country. It is expected to go beyond 30% once the IMF conditions are implemented to unlock $7 billion tranche. According to the set directions by IMF, the government is likely to increase tariff for power and gas, along with additional taxes worth Rs 200 billion.