Pakistan’s annual inflation rate increased to 31.4 percent in September from 27.4pc in August. On a month-on-month basis, inflation increased by 2pc in September, compared to a 1.7pc increase in August, says Pakistan Bureau of Statistics. This sharp rise in inflation is attributed to high fuel and energy prices,
Pakistan had secured a $3 billion loan program from the International Monetary Fund (IMF) in July to avoid a sovereign debt default. However, the conditions attached to this loan program have complicated efforts to control inflation. These conditions may include reforms such as easing import restrictions and removing subsidies, which can contribute to rising prices.
The Ministry of Finance anticipates that inflation will remain high in the coming months, hovering around 29-31 percent. This is expected due to adjustments in energy tariffs and significant increases in fuel prices. However, the report suggests that inflation is expected to ease, especially in the second half of the fiscal year starting on January 1.
Inflation in Pakistan has been elevated, primarily in double digits, since November 2021. The country initially targeted an inflation rate of 21pc for the current fiscal year but has been averaging around 29pc during the first quarter.
Food inflation remains high at 33.1pc, with significant year-on-year increases in non-perishable food items (38.4pc) and perishable food items (4.37pc). Urban and rural areas are both experiencing high consumer inflation, with rates of 29.7pc and 33.9pc year-on-year, respectively.
Some sectors, such as alcoholic beverages and tobacco, recreation, and culture, furnishing and household equipment maintenance, and non-perishable food items, have seen substantial increases in prices.
Analysts believe that the high inflation reading is in line with market expectations. They suggest that inflation may have peaked for the current fiscal year and expect it to gradually recede in the coming months. However, they also argue that higher inflation statistics should not significantly impact monetary policy.
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