Pakistan's Inflation Rate Rises To 14-Year High Of 24.9pc.

ISLAMABAD -- The inflation rate in the country swelled to 25 percent in July this year, which is highest in last 14 years mainly due to higher fuel cost and currency depreciation, which increased the prices of all food items as well as other commodities.

The inflation measured through Consumer Price Index (CPI) has recorded at 24.9 percent in July 2022-highest after 2008. On month-on-month basis, it has increased by 4.3 percent in July 2022 as compared to preceding month of June, according to the latest data of Pakistan Bureau of Statistics (PBS).

The CPI inflation Urban increased by 23.6 percent on year-on-year basis in July 2022. Meanwhile, CPI inflation Rural increased by 26.9 percent on year-on-year basis in last month.

Inflation has even gone beyond ministry of finance's projections. It had projected that inflation in July 2022 may hover around the level observed in June (21.3 percent). However, it has gone to 24.9 percent in the previous month. The Sensitive Price Index (SPI), which gauges rates of kitchen items on weekly basis, increased by 28.2 percent. On monthly basis, Wholesale Price Index (WPI) inflation on YoY basis increased by 38.5 percent in July 2022. According to the ministry of finance, international inflationary impulses in the US dollar became amplified by the accelerated depreciation of the Rupee against the US dollar. International spike in dollar rates and domestic uncertainty depreciated Pakistani rupees. These cost-push inflation drivers feed into the domestic retail prices. Up to May 2022, government policies among which the use of taxes and subsidies, temporarily and partially postponed their pass-through into the CPI. Furthermore, usually in the month of July, a positive seasonal factor appears to contribute upwards to the MoM inflation rate. All these critical factors will influence domestic inflation. 'Inflationary and external sector risks are building macroeconomic imbalances in the economy. Furthermore, the ongoing political unrest is increasing economic uncertainty, which is causing the rupee to depreciate and has an impact on the cost of production. All these factors are making the economic outlook uncertain.'

The government on Sunday has once again increased the diesel price, which would fuel the prices of food commodities. Recently, the government has enhanced electricity, which would further increase the inflation rate. The recent rains across the country have also caused damage to the standing crops...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT