Pakistan inflation increased to a record 36.4% in the year to April driven mainly by food prices, the highest rate in the region and up from March’s 35.4%.
According to the finance ministry’s latest estimate, the devaluation of the rupee and rising administered prices, which both contributed to an increase in overall costs, will keep inflation in the 36–38 per cent range.
Pakistan’s rural areas recorded food inflation of 40.2%, the statistics bureau informed. The rate of food inflation in urban and rural areas climbed to 48.1%, which is the highest level since FY16 when the bureau began tracking the two categories separately. Prices rose 2.4% in April from March.
Due to political unrest, financial mismanagement, and a delay in reaching an agreement with the International Monetary Fund, excessive inflation has already taken a heavy toll on the lower-income groups in society.
A report from the finance ministry claimed that because of the poor recovery from the flood-related damages, the supply of vital crops has not kept pace with local demand, which has exacerbated inflation. The central bank was enacting a contractionary monetary policy, however, inflationary expectations are not abating.
Consumer Price Index (CPI), a measure of a variety of goods and services, showed monthly inflation remained above 20 per cent for the 11th consecutive month from June to April. Then it reached 31.6 per cent in February, went above 35 per cent in March, and is currently even higher at 36.4 per cent. In April of the previous year, the reading was 13.4 per cent.
Data indicated that when compared to the prior month, inflation increased by 2.4pc in April. The index surged as a result of rising food, cooking oil, and transportation costs.
The CPI basket of goods and services is broken down into 12 primary components with varying weights. Three of them, food and non-alcoholic beverages, transportation, and recreation and culture saw price hikes of about 0.5 percentage points from the year before.
Although its weight in the CPI is less than 1% compared to food’s 30.42 %, the index for the alcoholic beverages and tobacco category saw the largest annual shoot-up, at 133.70 %.
As per the figures, the annual rate of food inflation in April was 46.8 per cent in urban regions and 52.2 per cent in rural areas. Additionally, last month, annual non-food inflation in urban and rural areas was 24.9 per cent and 29.9 per cent, respectively.
Core inflation, which excludes food and energy, was 24.9 per cent in rural areas and 19.5 per cent in urban areas. Overall inflation in urban and rural areas rose to 33.5 per cent and 40.7 per cent, respectively, year over year.
In 10 months (July to April) of this fiscal year, average inflation has elevated by the most recent CPI jump of 11.04 per cent to 28.23 per cent.
The food group’s prices soared the most in April compared to the same month last year which included tea (108.76%), wheat flour (106.7%), wheat (103.52%), eggs (100.88%), rice (87.86%), potatoes (76.87%), pulse moong (57.19%), pulse mash (56.38%), gram whole (55.55%), onion (51.87%), besan (51.17%), dry fruits (49.06%), pulse gram (48.41%), beans (47.45%), chicken (43.13%), bakery and confectionary (42.5%) and sugar (42.14%).
The non-food items with the highest price increases were textbooks (106.83%), stationery (83.73%), motor fuel (75.43%), gas charges (62.82%), washing soap/detergents/matchbox (60.41%), motor vehicle accessories (42.56%), motor vehicles (41.51%), household equipment (40.94%), construction input items (37.23%), marriage hall charges (32.89%), solid fuel (31.96%), personal grooming services (31.89%), cotton cloth (31.46%), electricity charges (30.84%), plastic products (30.59%), transport services (28.77%), mechanical services (25.02%), cleaning and laundering (24.28%), doctor (MBBS) clinic fee (21.55%) and tailoring (21.22%).