With the rising trend of inflation during this financial year, Consumer Price Index (CPI) has recorded a jump of 13 per cent in January 2022, which is the highest inflation rate recorded in the past two years. Pakistan had reported 14.6 per cent inflation rate in January 2020.
In December 2021, it was at 12.3 per cent, the Pakistan Bureau of Statistic (PBS) reported on Tuesday.
The inflation has recorded an upward trend for the past five month. As per the data of PBS, the CPI jumped to 12.96 per cent in January over the same month a year ago.
The Ministry of Finance (MoF) while releasing some data of inflation in regional countries has tried to give the impression that the inflation was due to increase in prices of global commodities.
“CPI inflation is recorded at 10.26 per cent during Jul-Jan FY-2022 as against 8.19 percent in the same period last year. The 12.96 per cent CPI in the month of January 2022 was mainly due to base effect and increase in global commodity prices,” the MoF claimed.
According to the ministry the upsurge in international food and fuel prices is mainly due to fall in the global food production and high demand due to coronavirus pandemic and supply chain disruptions, which has been transmitted in the domestic prices of these items.
The ministry while sharing data has compared inflation in Pakistan with the same in Turkey, Iran, India, Zimbabwe and Kirghizstan. As per the data inflation trend in Iran and Zimbabwe was 2.4 per cent and 5.2 per cent respectively in January as compared to 0.4 per cent recorded in Pakistan on MoM basis. As per the data India is showing less inflation trend during January 2021 to December 2021 as compared to the CPI in Pakistan.
Economists and experts had earlier predicted that the inflation numbers would be in digit which may also impact the interest rates by the State Bank of Pakistan (SBP) which is now following the headline inflation number to determine the policy rate instead of core inflation.
The electricity prices, rupee-dollar parity and international commodity prices were largely contributing to the rising inflation in the country
The PBS reported that the overall inflation rate recorded an increase in both the urban and rural areas. The inflation rate in urban areas edged to 13 per cent in January and rural areas surged to 12.9 per cent over the same month of the last year. In January last year, the inflation rate in urban areas was 5 per cent meanwhile, in rural areas it stood at 6.6 per cent.
Similarly, rural CPI inflation increased by 12.9 per cent on a year-on-year basis in January 2022 as compared to an increase of 11.6 per cent in the previous month and 6.6 per cent in January 2021.
While excluding the food and energy components, urban core-CPI increased by 8.2 per cent year-on-year in January 2022 against an increase of 8.3 per cent in the previous month and 5.4 per cent a year ago in the same month. Likewise, rural core-CPI increased 9.0 per cent Y-on-Y compared to an increase of 8.9 per cent in the previous month and 7.8 per cent in January, 2021.
Lack of Professionalism in GOVT