Islamabad: While mired in a terrible economic crisis, Pakistans inflation created a new record in January and reached the highest level after 1975, mainly due to supply constraints as thousands of containers of food items, raw materials and equipment are stuck at ports after the cash-strapped government curtailed imports due to a shortage of dollars in the country.
Consumer Price Index (CPI) inflation in January 2023 accelerated to 27.55 per cent from 24.47 per cent a month earlier, as the unprecedented surge in food items’ prices in the month jacked up the general inflation, The News reported.
In May 1975, the CPI inflation was 27.77 per cent.
The average inflation in July-Jan 2022/23 was recorded at 25.4 per cent against only 10.26 per cent in the same period of FY22, according to the Pakistan Bureau of Statistics (PBS).
The core inflation (excluding the food and energy components) also peaked in the month under review since 2011.
It indicates that the State Bank of Pakistan (SBP) will keep the discount rate elevated in the coming monetary policy review.
On January 23, the central bank raised the policy rate by 100 basis points to 17 per cent — the highest since 1998 — to help stabilise the economy.
High inflation has become a nightmare amid the financial crunch and insufficient supplies, The News reported.
It is eroding the political capital of the 13-party coalition government led by the PML-N.
It is not only affecting ordinary people but also industries and businesses due to costly bank financing.
The inflation rate in Pakistan averaged 8.05 per cent from 1957 until 2023, reaching an all-time high of 37.8 per cent in December 1973 and a record low of minus 10.32 per cent in February 1959.