Inflation smashes all previous records, touching whopping 31.5%

ISLAMABAD:The consumer price index (CPI), which measures inflation in Pakistan, shattered all previous records and soared to 31.5% in February as a result of sharp increases in the costs of transportation, housing, and food, according to a report released by the Pakistan Bureau of Statistics (PBS) on Wednesday.

The PBS report increased the likelihood that interest rates will climb further at the March 2 meeting of the monetary policy committee (MPC). The inflation rate quickly reached 31.5% in February over the prior year, which was the highest since data collection in July 1965. When it was last measured, in April 1975, the inflation rate was just over 29%. The finance ministry had anticipated inflation to range from 28% to 30%, but the pace of price growth was higher.

According to the inflation data, the government will need to reevaluate its plan for obtaining the crucial $1.1 loan tranche from the International Monetary Fund (IMF). The government had been shocking the populace repeatedly because it had been unable to make up lost ground with the IMF.

The core inflation rate, which is determined after taking volatile energy and food prices out of the equation, also skyrocketed to 17.1% in urban regions and 21.5% in rural ones last month, indicating that the rate of price growth was accelerating across the majority of good and service categories.

The coalition government’s decision to restrict imports in June caused the inflation rate to rise above 20%, and this situation had gotten worse as a result of the container backlog, the weaker rupee relative to the dollar, and the stringent policies put in place by the Ishaq Dar-led Ministry of Finance.

The Wholesale Price Index (WPI), which tracked prices in the wholesale market, increased significantly in February from 23.6% to 36.4%.

According to the PBS, both urban and rural areas saw an increase in the total inflation rate. Urban areas had an increase in inflation of 28.8% in February, while rural areas saw an increase of 35.6%. In February of last year, the inflation rate was 11.5% in urban regions and 13.3% in rural areas.

On an annual basis, the food inflation rates in cities and villages respectively rose to 47% and 41.9%. Food inflation in cities and villages was 14.6% and 14.3%, respectively, in February 2022.

In contrast to 9.9% and 12.2% in the same month last year, the non-food inflation rate in urban areas was 20.8% and 25.3% in rural areas.

Housing, water, electricity, gas, and fuel group inflation increased by 3.11% (year-over-year) in the previous month, accounting for one-fourth of the basket’s weight.